There are many indicators in foreign exchange transactions, such as the ASI indicator, which is one of the commonly used indicators in foreign exchange. It can grasp the highs and lows in the process of price fluctuations in advance by using the asynchrony between the vibration rising and falling indicator line and the real price trend. Today, I will introduce to you what are the buying skills of ASI indicators in foreign exchange trading.
The Vibration Lift Index (ASI), created by Welles Wilder. The ASI indicator uses the opening, highest, lowest, and closing prices compared with various prices on the previous trading day as the calculation factor.
01 How to use ASI indicator
1. When ASI falls below the previous low point, it is a sell signal.
2. When ASI breaks above the previous high point, it is a buy signal.
3. The price is from bottom to top. When you want to cross the high point hold-up area of the previous wave, when it is close to the high point, it has not been determined whether it will pass smoothly. If ASI leads the price, one step ahead of time, through the previous wave of ASI highs relative to the exchange rate, then after the next day, it can be determined that the exchange rate will inevitably break through the high-point hold-up zone.
4. When the exchange rate moves from top to bottom, when it wants to cross the dense support zone of the previous wave of low points, it is close to the low point and it is not yet determined whether it will break through the support due to loss of confidence. If ASI leads the exchange rate, one step earlier and breaks below the previous wave of ASI lows relative to the exchange rate, after the next day, it can be determined that the exchange rate will subsequently fall below the price point support zone.
5. When the exchange rate trend is higher and higher, but ASI has not formed a "bull divergence" relative to a new high, you should sell.
6. When the exchange rate trend is lower than the wave, but ASI has not formed a "bear divergence" from a new low, you should buy.
02 ASI indicator buying skills
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Buy stocks when the ASI indicator leads the price break through the previous high
The price encountered resistance when it rose to near the previous high and is gaining momentum to break through. As the ASI indicator led the price to break through the previous period, it formed a high at almost the same time. Therefore, when the ASI indicator leads the price and breaks through the previous high, it indicates that the market has entered the end of consolidation and continues to rise. It's just that this trend has not been reflected in the price for the time being. This is a signal that the price will break upward along with the ASI indicator in the future. Therefore, if the ASI indicator completes the breakthrough, investors should actively buy stocks.
Under normal circumstances, the longer the price continues to consolidate below the previous high, once a breakthrough is formed, the more room for its rise will be, and if the volume of the indicator clearly starts to enlarge when the indicator breaks the previous high, it means that the price has risen The signal is stronger.
The price deviates from the ASI indicator to buy the stock
After the price has fallen for a period of time, the price level has been very low, and the price has continued to fall, constantly hitting new lows, but at this time the ASI indicator has begun to rise, but it has become higher and higher, and the price has formed a bottom departure pattern.
When the price and the index form a bottom divergence, although the price still continues to fall, there has been a bottoming-out trend. After the divergence is completed, the price will enter a rising market. Therefore, investors should actively buy stocks when prices signal a rebound.
In actual trading, when the price drops rapidly, the ASI indicator continues to trade sideways or the downward trend is slow, which can also be used as a sign of price decline. When using this indicator to buy or sell, investors should make a final judgment based on a comprehensive analysis of technical indicators such as K-line patterns, trading volume, and moving average indicators. Under normal circumstances, if the transaction volume gradually shrinks during the divergence process, and the transaction volume increases after the divergence is completed, it means that the short side power is weakening in the market and the multi side power is increasing. At this time, the possibility of price increases increases.