Accumulative Swing Index (ASI)


Accumulative Swing Index

Wells Wilder, the creator of the ASI indicator, said, “There is a phantom line somewhere between the cycles of open, high, low and close prices, which is the real market.” The accumulation swing index shows this phantom line – the real market line. The Accumulative Swing Index uses a scale from 0 to 100 for an up trend and 0 to -100 for a down trend.

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Quick Summary of ASI

  • The positive value of ASI is – uptrend
  • The negative value of ASI is – downtrend.
  • ASI Trend Line Breakout – Validates a breakout on the price chart.

How to Read ASI

If there is a long-term trend, then ASI has a positive value; And if long-term trends fall, the indicator appears in a negative value. During the moving market, ASI runs between + and – values. Accumulate Swing Index is widely used for confirmation or denial of trend line breakouts on foreign currency charts. Trend lines are drawn on both: compared to each other to confirm/reject the chart line and the graph of the indicator and the trend line breakout signal.

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How to trade with Accumulative Swing Index

Accumulating Swing Index indicator Wells Wilder, in his book “New Concepts in Technical Trading System”, describes why ASI can be used for the trend line breakout confirmation. He said that ASI is capable of showing the actual strength and direction of the market and since the automatic swing index is heavy in favor of close pricing, the daily up and down spikes do not adversely affect ASI.

  • Buy Signals with ASI occurs when the indicator is higher than its previous swing high.
  • The signal cell occurs when the ASI falls below its last swing low.

Related: Average True Range (ATR) , click here

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