Experienced Forex traders may be familiar with the Accumulative Swing Index. It’s also known as the Cumulative Oscillation Index, or one of the best tools used to verify if a trend is near its final stage.
This practical indicator is the choice of many who use strategies in their efforts to make money FX trading Forex.
Seasoned traders also utilize ASI to spot potential lucrative movements, as the oscillator may indicate divergences between the currency prices and the index.
In order to obtain a true reading of ASI, it’s important to add the Swing Index that results from the Average Trading Range. To get the most out of strategic tools such as this one, it’s usually best to become a pro at plotting trend lines. When using ASI, note that it tends to incline towards the closing prices. This means you’ll have an easier time at identifying breaks without the worry of getting faked-out by a false signal.
ASI can also be applied with other indicators such as profit triangles and trend lines as the market consolidates. In this case, they’re excellent aids for discerning support and resistance levels.
When ASI is above the most important resistance level there’s usually a breakout to the upside. It’s at such point when most traders opt for placing trades.
Trading with a secret weapon like a strategy is considered smart, whether you’re inclined to buy and sell the U.S. Dollar, the other dollar, or any of the majors.