In this guide to understanding the Swing Index, we’ll show you what this indicator looks like and teach you how to interpret it.
Contents
What Is the Swing Index?
The Swing Index is a technical indicator that attempts to predict future short-term price action.
The Swing Index advertises itself as a tool for very short-term trading.
What Does the Swing Index Look Like?
A few of the many potential buy and sell signals are shown below in the chart of the E-mini Russell 2000 Futures contract:
How to Interpret the Swing Index
- When the Swing Index crosses over zero, then a trader might expect short-term price movement upward.
- When the Swing Index crosses below zero, then a trader might expect short-term price movement downward.
As can be noted from the chart above of the e-mini futures contract, numerous potential buy and sell signals are given.
The Swing Index is used in its later format, the Accumulative Swing Index.
Regulated Brokers: Where Can I Trade Commodities?
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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74%-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
FAQ
Below we answer some common questions about swing indicators.
What is swing trading?
Swing trading focuses on small price movements rather than large trends, operating on the idea that prices constantly oscillate between bears and bulls. With swing trading, traders take profits over a vert short timeframe on both negative and positive price changes.
Further Reading
Learn more about technical analysis indicators, concepts, and strategies including:
- VIX / VXN Volatility Indexes
- Mass Index
- Herrick Payoff Index
- Directional Movement Index
- Commodity Channel Index
- Commodity Select Index
- Stochastic RSI
- Ulcer Index
