If you want to fiddle around with technical analysis in a casual, no-big-deal kind of way, you can just eyeball things. Maybe draw a few lines on a graph, squint, hold up your thumb, and say stuff like "Looks like an uptrend to me."
If you want to go hardcore technical analysis, however, you need to break out the serious quantitative calculations. Enter the Average Directional Index, and its demon-math children, the +DI and the -DI.
Taken together, the relationship of the positive directional indicator and the negative directional indicator lets you know whether (and to what extent) there is an uptrend or downtrend in a security. But it's no eyeball situation. Figuring the +DI (and the -DI for that matter) involves sigmas and all sorts of other high-end mathy stuff.
The key, though: if +DI is above -DI, you've got an uptrend on your hands. The higher above it gets, the stronger the bullish trend. Meanwhile, once +DI drops below -DI, now you've found a downtrend. And, as you've probably guessed, the further below it gets, the more intense the bearish trend.
When +DI and -DI cross each other, marking a transition from a bullish environment to a bearish environment (or vice versa), traders treat that as a signal to act. They might just flip a coin to decide what to do, but the cross definitely signals that they should do...something.
