Absolute Strength Market Indicator for MetaTrader 5

0
424
Absolute Strength Market Indicator for MetaTrader 5

The Absolute Strength Indicator, also known as the ASI, measures the strength of a currency pair’s trend. Unlike relative strength indicators that compare one currency to another, the ASI focuses on the absolute price movement. It provides insights into whether a trend is gaining or losing momentum.

Calculation Methodology

The ASI combines price changes and volume data to create a single value. The formula involves comparing the current close price with the previous close price and factoring in volume. The resulting value oscillates around a zero line, indicating bullish or bearish strength.

Components and Parameters

  • Close Price: The primary input for ASI calculation.
  • Previous Close Price: Used to determine the trend direction.
  • Volume: Reflects market participation and conviction.

Trend Strength Measurement

Trend Strength Measurement

  • Histogram bars represent the difference between the ASI and its signal line.
  • Larger bars indicate stronger trends.
  • Pay attention to the bar height for trend confirmation.

Combining With Other Indicators

Using Moving Averages

  • Cross-referencing ASI with moving averages enhances accuracy.
  • Golden and death crosses provide valuable insights.

RSI and Absolute Strength

  • RSI and ASI complement each other.
  • Confirm signals by comparing their readings.

How to Trade with Absolute Strength Market Indicator

Buy Entry

How to Trade with Absolute Strength Market Indicator - Buy Entry

  • Look for the blue bullish signal line crossing above the red bearish signal line.
  • This indicates the start of a bull market.
  • Enter a BUY position when the crossover occurs.
  • Set the stop-loss below the previous swing low.
  • Continue holding the BUY position as long as the color of the top line remains blue.
  • If the red signal line crosses above the blue signal line, consider it the end of the trend.
  • Exit the BUY trade with a profit.

Sell Entry

How to Trade with Absolute Strength Market Indicator - Sell Entry

  • Observe the red bearish signal line crossing above the blue bullish signal line.
  • This suggests the start of a bearish price trend.
  • Enter a SELL trade when the crossover occurs.
  • Set the stop-loss above the previous swing high.
  • Hold the SELL position until the opposite crossover.
  • If the blue signal line crosses above the red signal line, consider it the end of the trend.
  • Exit the SELL trade.

Absolute Strength Market Indicator Settings

Absolute Strength Market Indicator Settings

Conclusion

Absolute Strength Market Indicator for MetaTrader 5 Is Armed with this knowledge, traders can navigate the forex market with greater confidence and precision. Remember that while the ASI is a powerful tool, it’s essential to combine it with other indicators and sound risk management practices.

Recommended MT5 Brokers

XM Broker

  • Free $50 To Start Trading Instantly! (Withdraw-able Profit)
  • Deposit Bonus up to $5,000
  • Unlimited Loyalty Program
  • Award Winning Forex Broker
  • Additional Exclusive Bonuses Throughout The Year

XM broker

>> Sign Up for XM Broker Account here <<

FBS Broker

  • Trade 100 Bonus: Free $100 to kickstart your trading journey!
  • 100% Deposit Bonus: Double your deposit up to $10,000 and trade with enhanced capital.
  • Leverage up to 1:3000: Maximizing potential profits with one of the highest leverage options available.
  • ‘Best Customer Service Broker Asia’ Award: Recognized excellence in customer support and service.
  • Seasonal Promotions: Enjoy a variety of exclusive bonuses and promotional offers all year round.

fbs broker

>> Sign Up for FBS Broker Account here <<

(Free MT5 Indicators Download)

Click here below to download:

AbsoluteStrengthMarket – indicator for MetaTrader 5

Get Smarter About Forex Trading Using Indicators

Join 100,000+ subscribers and get our 5 min daily newsletter on what matters in forex.

We do not sell or share your information with anyone.

LEAVE A REPLY

Please enter your comment!
Please enter your name here