The ASI uses candlestick charts to calculate the volatility of the market, as it swings from one trend to another. From this, traders identify various buy and sell signals.
The Accumulative Swing Index uses maximum and minimum marks called Swing Points, which indicate the starting point of a small or large trend. The Swing Index Value runs from -100 to 100 to determine the direction of the trend. When the ASI exceeds zero, the trend is entering a positive phase and the asset price is expected to increase. When the indicator falls below 0, the trend is in recession and most likely the prices will fall. Use the ASI with other indicators to confirm breakout signals and trends.