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Accumulative Swing Index (ASI)

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The Accumulative Swing Index (ASI) is a trendline indicator used by technical traders to figure out the overall direction a stock price is moving. It looks at the opening, closing, and high, and low prices of a stock over time, usually shown on candlestick charts. Traders use it to understand the long-term trend of a stock.

Understanding the Accumulative Swing Index

The Accumulative Swing Index (ASI) comes from J. Welles Wilder’s swing index. Wilder created the ASI to improve upon the swing index. You can find more about the ASI in Wilder’s book “New Concepts in Technical Trading Systems.”

The ASI trendline is one of many lines that help technical analysts understand when to buy or sell stocks. Other popular indicators include weighted alpha, moving average, and volume-weighted moving average.

The ASI is shown as a line on a chart. Traders use specialized charting software like MetaStock, Worden TC2000, eSignal, NinjaTrader, Wave59 PRO2, EquityFeed Workstation, ProfitSource, VectorVest, and INO MarketClub to see it. It’s usually displayed below the main price chart as its line, similar to how volume bar charts look. Both the Accumulative Swing Index and the Swing Index can be part of a technical analyst’s chart setup.

What the Accumulative Swing Index Tells You

The Swing Index Value adds up to create the Accumulated Swing Index trendline, usually ranging from 100 to -100. Since it focuses on prices, it usually mirrors the candlestick pattern of a price. Both the Swing Index and ASI can be applied to analyze various securities. While it’s commonly used in futures trading, it’s also handy for examining price trends in other assets.

Traders often combine the ASI with trading channels to validate breakouts because the same trendline needs to be crossed in both cases. Typically, a positive ASI indicates a likelihood of a higher long-term trend, while a negative ASI suggests a lower long-term trend.

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