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Creator: Definedge
PSI period: 10
Average period: 8
In the Price Strength Index indicator, two lines are shown below the chart.
1 – Green line represents Price Strength Index
2 – Red line represents the Average line of the PSI indicator
The price strength index calculates the advances and declines of a stock over a defined period. It measures the strength of the advances compared to the total volatility of stock returns rather than averaging the advances and declines.
When the Price Strength Index is above the zero line and its average line, it indicates a bullish trend. In contrast, when the Price Strength Index is below the zero line and its average line, it indicates a bearish trend.
The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.
This indicator is also available in the System Builder of RZone & TradePoint for all charting methods. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.
The indicator is applicable to all types of charting. Calculated based on the number of columns on P&F charts, bricks on Renko charts, lines on Line-break charts, candles on Heikin ashi charts, and lines on Kagi charts. While the formula and reading of the indicators remain the same, they become more dynamic on these charts.