Absolute Strength Indicator: Buyer-Seller Lines, Levels, and Smoothing
Summary
The Absolute Strength indicator measures the relative strength of buyers and sellers in points, presenting it as an alternative to RSI, Stochastic, and DMI. The description says point-based values can show finer-grained changes in strength than percentage-based readings and may avoid a Stochastic weakness during strong trends. It does not provide comparative test results to establish those claimed advantages.
The indicator offers three ways to define strength and weakness levels: fixed overbought and oversold thresholds, a standard-deviation channel, or a rolling high-low channel. Users can smooth prices before calculating buyer and seller strength, then smooth the resulting lines again, selecting SMA, EMA, Wilder, or LWMA methods. Signal lines are intended to identify bends in the strength lines, and the implementation can draw indicator lines for higher timeframes. The description explains configuration options, but does not specify a trading system, entry or exit rules, or evidence of profitability; parameter choices and performance therefore require independent evaluation.
Key ideas
- The indicator compares buyer and seller strength using point values rather than percentage readings.
- Strength and weakness thresholds can use fixed levels, a standard-deviation channel, or a rolling high-low channel.
- Price inputs and calculated strength lines can be smoothed with several moving-average methods.
- Signal lines help identify turning points in the buyer and seller strength lines.
- The description gives no tested trading rules or evidence that the indicator improves returns.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.