Swing Index
This momentum indicator is used primarily as a component
of the Accumulative Swing Index.
Overview
Welles Wilder developed the Swing Index to provide a
line "which cuts through the maze of high, low and close prices and indicates
the real strength and direction of the market." (For a detailed description
refer to Wilder's book New Concepts in Technical Trading Systems.)
The Swing Index is used primarily as a basis for Wilder's
Accumulative Swing Index (ASI) indicator.
Mr. Wilder summarizes the significance of the Swing Index
as follows:
- Swing Index gives one numerical value that always falls between
+100 and -100, while incorporating current and previous opening and
closing prices and true range in its complex calculation.
- Swing Index provides a line which gives definitive short-term swing
points.
Interpretation
The Swing Index alone doesn't provide much in the way
of signals. It should be used in conjunction with the Accumulative Swing
Index.
See the Accumulative Swing Index.
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