Swing Index

The Swing Index is a complex indicator developed by J. Welles Wilder Jr and detailed in his book New Concepts in Technical Trading Systems. Wilder designed this indicator to provide better determination of the true market trend. The Swing Index compares the ratio between current prices (open, high, low, and close) and the prices from the previous session.

Calculation Method

SI = ((50 * K) / M) * ((C - CP) + 0.5 * (C - O) + 0.25 * (CP - OP)) / R

with:

• K: The maximum of ((H - C_P) and (L - C_P))
• H: Today's high
• C_P: Yesterday's closing price
• L: Today's low
• M: The limit value of the variation defined for market futures
• C: Today's closing price
• O: Today's opening price
• O_P: Yesterday's opening price
• R: Variable factor, a function of today's closing price, yesterday's low and high.

Note: for stocks, there is no predefined limit value of variation. Axial Finance uses the value 300 for the calculation.

Example

Interpretation

The Swing Index is primarily used to calculate the Accumulation Swing Index.