Description

• Developed by J Welles Wilder, swing index helps to give real price of security using its latest bar open and close rate
• It uses previous period’s open, high, low and close and relates it with current bar body to predict price action for future
• It is the basic input for accumulation swing index
• It oscillates between -100 to +100 levels

Interpretation

• Swing Index crossing over zero is buy signal as price is expected to continue upward movement
• Swing Index crossing below zero is sell signal as price is expected to move downwards

Default Parameters Used/Inputs

• Open Line
• High Line
• Low Line
• Close Line
• Limit

Returns/Output

Swing Index value for the stock

Formula

Swing Index = 50 * [ {(C – Cy) + 0.5*(C-O) + 0.25*(Cy+Oy)}/R ] * K/T
where, C = current close, Cy – previous close, O – Open rate, Oy – Previous Open
K = Higher of H – C or L – C & T = limit move
R=(high – low) + 0.25 * (Cy + Oy)