Guide to Accumulation Swing Index Indicator (ASI)

The cumulative fluctuation index (Accumulation Swing Index, ASI) was developed by the well-known trader-analyst Wales Wilder. The indicator examines the previous minimums and maximums of the price of the trading instrument and on the basis of them gives its signals.

For the first time, the indicator is described in Wilder’s book “New concepts of technical trading systems.” The author claims that the indicator is very close to this schedule. Therefore, the ASI graph can be analyzed using graphical analysis. The cumulative fluctuation index (Accumulation Swing Index, ASI) perfectly confirms the breakdowns and rebounds from the support and resistance lines. If there was a breakdown in the price chart, the indicator will save you from false signals, when you can not confirm the breakdown on your chart. And vice versa.

The formula for calculating the Accumulation Swing Index (ASI)

SI (i) = 50 * (CLOSE (i-1) -CLOSE (i) + 0.5 * (CLOSE (i-1) -OPEN (i-1)) + 0.25 * (CLOSE (i) – OPEN (i)) / R) * (K / T)

ASI (i) = ASI (i-1) + SI (i)

Where:

SI (i) is the Swing Index value;
SI (i – 1) – the value of the Swing Index on the previous candle;
CLOSE (i) – the closing price;
CLOSE (i – 1) – the closing price of the previous candle;
OPEN (i) – the price of opening;
OPEN (i – 1) – the price of opening the previous candle;
R – the ratio of the closing price to the previous extremum;
K – comparison of extremes: (HIGH (i – 1) – CLOSE (i)) and (LOW (i – 1) – CLOSE (i));
T – the limiting change in price;
ASI (i) is the value of the Accumulation Swing Index, ASI (Cumulative Vibration Index).

Adding an indicator to the MetaTrader

The cumulative fluctuation index (Accumulation Swing Index, ASI) is not included in the standard equipment of MT4 and MT5 trading platforms. In order to add it, you need to copy the indicator files to the appropriate directory on your computer.

If you have MetaTrader 4. Open C: \ Program Files. Then find the file folder of the trading terminal there and open it. Go to the directory … \ MQL4 \ Indicators and copy the file / files to the file there. The Accumulation Swing Index (ASI).

If you have MetaTrader 5. Open C: \ Program Files . Then find the file folder of the trading terminal there and open it. Go to the directory … \ MQL5 \ Indicators \ Examples and copy the file / files to the file there. The Accumulation Swing Index (ASI).

After that, start the trading terminal. Click ” Insert / Indicators / Custom “. A list of indicators appears. Select the Accumulation Swing Index (ASI).

Trading system for Accumulation Swing Index Indicator

The cumulative fluctuation index (Accumulation Swing Index, ASI) in addition to graphical analysis makes it possible to analyze the divergence of the price chart and indicator.

The main signals of the Accumulation Swing Index (ASI) for Wilder:

  • ASI gives quantitative parameters of price fluctuations;
  • ASI gives short-term fluctuations;
  • Using ASI, you can see the real strength and direction of the market.

Simple trading tactics

To open a deal for sale:

  • The cumulative fluctuation index (Accumulation Swing Index, ASI) formed an upward support line.
  • We wait until the indicator line breaks through it.
  • At the opening of the next candle after the breakdown – we open a deal for sale.
  • Stop Loss is set higher by 3-5 points of the previous extremum.

Further, the transaction can develop in two scenarios:

  • The price will go up and Stop Loss will work
  • The price will go where we need, that is down and MA will break, which we previously added to the schedule. The MA period should not be taken very long, for example, 25.

 



If the transaction develops according to the second scenario – perfectly, wait for the signal to close with a profit. We will close the deal when the candle closes above the MA, as shown in the figure below.

Accumulation Swing Index Indicator (ASI) accumulation_swing_index_mt4

For a transaction to buy the reverse terms.

A few simple rules in conclusion

Remember, there are no indicators on Forex that are not mistaken. The cumulative fluctuation index (Accumulation Swing Index, ASI), like any other, requires confirmation of its signals. When building your own trading system, use several indicators.

Observe Money Management. Never in one transaction risk more than 2 percent of your capital. This approach protects you from ruin and will allow you to earn a stable income on Forex using the Accumulation Swing Index (ASI).

Clearly, follow your trading strategy. If you need to open a deal on the Accumulation Swing Index (ASI) strategy, open it, fix the result, fix it, and it does not matter whether you are positive or not. Only following the rules of the Accumulation Swing Index (ASI) “from and to” will make it possible to earn.

Download Accumulation Swing Index Indicator (ASI)

You may download The cumulative vibration index (Accumulation Swing Index, ASI) for MT4 

or you may download The cumulative vibration index (Accumulation Swing Index, ASI) for MT5 

Guide to Accumulation Swing Index Indicator (ASI)
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