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Swing
Index
Description
The
Swing Index seeks to isolate the "real"
price of a security by comparing the relationships
between the current prices (i.e., open, high, low,
and close) and the previous period's prices.
The
Swing Index requires opening prices.
Although
it is beyond the scope of the manual to completely
define the Swing Index, the basic formula is shown
below. Step-by-step
instructions on calculating the Swing Index are
provided in Wilder's book, New Concepts In
Technical Trading Systems.
Wilder
notes the following characteristics of the Swing
Index.
-
It
provides a numerical value that quantifies
price swings.
-
It
defines short-term swing points.
-
It
cuts through the maze of high, low, and close
prices and indicates the real strength and
direction of the market.
Refer
to the Accumulation
Swing Index for additional interpretational
information regarding the Swing Index and the
"limit move". |
