Absolute Strength Oscillator: Bull and Bear Strength Calculation
Summary
The Absolute Strength Oscillator (ASO) is described as a trend-following indicator that compares bullish and bearish forces to represent the current market trend. Its configurable inputs include the calculation period, smoothing period, mode, calculation method, and applied price. The mode can use RSI or Stochastic, with separate illustrations referenced for each.
The calculation derives bull strength from price relative to the lowest price over the selected period, and bear strength from the highest price relative to price. It then averages each series over the period and smooths those averages using the chosen method. The description explains the indicator’s construction but does not specify signal thresholds, trading rules, parameter recommendations, or empirical performance. Traders would need to assess how the indicator behaves on their chosen markets and timeframes before relying on it.
Key ideas
- ASO represents bull and bear strength as a trend-following indicator.
- Bull strength compares the applied price with the period low, while bear strength compares the period high with that price.
- The strength series are averaged and then smoothed using configurable settings.
- The indicator can use RSI or Stochastic mode, but the document provides no tested trading rules or performance evidence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.