Good morning everyone.
OK: the 'issue' with the Accumulative Swing Index ('ASI') and consequently the Trailing Index SAR ('TISAR') is this:
The system uses a commodity as an example (which, as you all know, 'the man' was a commodities trader ONLY at the time).
Commodity prices are always quoted in the form '$999.99' but (some, most) forex pairs are quoted in the form '$9.9999' or '0.9999'. This causes a problem BECAUSE if you don't allow for the decimal places your ASI gives you a result that fluctuates between -1 and +1 which is useless. SO the fix is this: you calculate everything to 4 decimals places exactly as it is on the worksheet BUT you DIVIDE your resulting ASI by what I call a 'PIPFACTOR' (which really is a 'tick value'). In other words: Soybeans will have a 'PIPFACTOR' of 1 BUT GBP/CHF will have a 'PIPFACTOR' of 0.0001 and GBP/JPY will have a 'PIPFACTOR' of 0.01. This gives you a 'corrected' ASI (which I call a 'PIPASI') and it is FROM THIS 'PIPASI' that you add or subtract your 60 points (pips) to get the value of your TISAR.
To make things easy I use these pages to get my 'PIPFACTOR' (which is denoted as the 'tick value'. Note that it is the 'tick value' that is to be used NOT the $ amount):
GCI Financial Ltd - Online Forex and CFD Trading
On the CFD accounts it's interesting to note that the 'PIPFACTOR' (or tick value) for ???/ZAR is 0.001 AND NOT 0.0001 as one would expect. Same with Gold i.e. the 'PIPFACTOR' (or tick value) for Gold is 0.1 AND NOT 0.01 as one might expect.
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