The DMI (+DI,-DI) and ADX indicators should be used simultaneously to help evaluate whether a currency is in a trending or trading range environment and importantly to identify an impending change in trend.
The ADX helps ascertain whether the currency is experiencing directional movement or not. High readings indicate the currency is experiencing trending trading conditions (has significant directional movement), low readings indicate a lack of directional movement indicative of a trading range market. The ADX tells nothing about the direction the price is moving and should be used only to evaluate its trending or non-trending characteristics.
The DMI (+DI,-DI) should be used to ascertain whether a currency is trending higher or lower. A +DI line above the –DI line indicates an upward trend as +DI (the measure of upward movement) is greater than –DI (the measure of downward movement). A –DI line above the +DI line indicates a downward trend since the measure of downward movement –DI is greater than +DI the measure of upward movement. Convergence of +DI and –DI from extremities can indicate a weakening of the prevailing trend.