<p>The Negative Directional Indicator (-DI) is a technical analysis tool used to identify changes in the direction of a market's momentum. It's one of the key components of the ADX (Average Directional Index) indicator, developed by J. Welles Wilder Jr.</p>

<h2>How It Works</h2>
<p>The -DI is calculated using a 14-period average of the sum of the negative changes in price, divided by the true range. The formula is as follows:</p>
<p><code>-DI = 100 * [(1 - (Sum of Negative Changes / True Range)) * 100]</code></p>
<p>The true range is the greatest of the following: current high less the current low, the absolute value of the current high less the previous close, and the absolute value of the current low less the previous close.</p>
<p>When the -DI line crosses above the +DI (Positive Directional Indicator) line, it suggests a potential change from a bullish to a bearish trend. Conversely, a cross below the +DI line indicates a potential change from a bearish to a bullish trend.</p>

<h2>Why It Matters for Traders</h2>
<p>The -DI is crucial for traders as it helps in:</p>
<ul>
  <li><strong>Trend Identification</strong>: It aids in identifying the start and end of trends.</li>
  <li><strong>Entry and Exit Points</strong>: It can signal potential entry and exit points for trades.</li>
  <li><strong>Risk Management</strong>: It can help in setting stop-loss levels and take-profit targets.</li>
</ul>

<h2>Example</h2>
<p>Consider the EUR/USD pair on the MetaTrader 5 platform. If the -DI line crosses above the +DI line, it could signal a potential bearish trend. A trader might then consider shorting the pair, with a stop-loss above the recent high and a take-profit target at a recent low.</p>

<h2>Key Takeaways</h2>
<ul>
  <li>The -DI is a component of the ADX indicator and helps in trend identification.</li>
  <li>A -DI above +DI suggests a potential bearish trend, while a -DI below +DI suggests a potential bullish trend.</li>
  <li>The -DI can be used to identify entry and exit points, and to manage risk in trades.</li>
</ul>