Plus Directional Movement (PLUS_DM)

PLUS_DM measures upward price movement by calculating the difference between consecutive highs, smoothed over a specified period (default 14). When the current bar's high exceeds the previous high by a certain amount, and this movement exceeds the downward movement, PLUS_DM records this directional pressure. Developed by J. Welles Wilder as part of the Directional Movement System, PLUS_DM is a fundamental component used to calculate the Plus Directional Indicator (DI+) and ADX. Higher PLUS_DM values indicate stronger upward directional momentum.

Technical analysts use PLUS_DM mainly as a building block for calculating PLUS_DI and ADX rather than as a standalone indicator. However, comparing PLUS_DM directly to MINUS_DM reveals raw directional pressure - when PLUS_DM > MINUS_DM, upward movement dominates the market. PLUS_DM is essential for understanding the mechanics of ADX and directional indicators. Advanced traders and algorithm developers use it for building custom directional systems or weighted trend strength indicators. Typically combined with MINUS_DM, ADX, and DI indicators for complete directional analysis.