Webby's RSI (Really Simple Indicator) is a technical indicator designed to gauge the health of an uptrend. The concept and original implementation was created by Mike Webster, previously a portfolio manager for William O'Neil, founder of Investor's Business Daily.
Most often used with the Nasdaq Composite (IXIC), Webby's RSI is the percentage of the low versus the 21-day moving average. At the beginning of a bull market, the higher the value, the better, as we want to see power.
Using the zones shown on the chart: 0.5% and 2.0% - Ideal 2.0% to 4.0% - Caution 4.0%+ - Warning
Release Notes
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Version 2.0
▪ Optional background color shown as a gradient. ▪ Customize plot type, color & moving average. ▪ Show/hide zone lines.
Thanks John! Appreciate the spirit of sharing. Will be trying to see how this works and how I can incorporate this into my trading.
JohnMuchow
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You're welcome, I hope you find it helpful.
capableProfile60219
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Hi John. Why there is no possibility to create a Webby even for bear swings ?
mike_dominguez
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Thanks to John for sharing his work. I've had lengthy discussions with folks, and this code contains a bug in calculating the MW-RSI data point.
When we calculate the % change between two values, let's call them A and B, we do not need to introduce a third value, C. We calculate percent change by dividing the difference between our ending value and our starting value by our starting value and multiplying by one hundred. Our ending value is the low of the day ('low' in this code), and our starting value is the 21d EMA ('_21DayExpMovingAverage').
This code introduces a third value, namely the close. There should not be a third value.
mike_dominguez
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For the record, this in no way reflects on the excellent work John did scripting this in Pine for TradingView. The methodology for the calculation comes directly from Mike Webster's original code, and John's work represents a faithful port to Pine of the original implementation.
mwebster1971
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@mike_dominguez, Mike I'm finally making my switch over to TV from TS...very cool platform! Since John made it open source, feel free to change it to the way you prefer. I like to use close...yes I get your "math" point...but you know me I do things my own way;) I always think in terms of close not the moving average. This was one of my many personal indicators...I had never planned on sharing it...but when I did I should have changed it to the way you are suggesting OR made a note that I like to use close (right or wrong). Take care. John BAM Muchow does GREAT work...he always has!
mike_dominguez
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@mwebster1971, w00t! Welcome and glad to have you! Agree that Bam does amazing work. Thanks for sharing the additional context around the calculation for the indicator...makes sense! Doing things your way makes you you, and I have tremendous respect for you!
mwebster1971
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@mike_dominguez, Thanks Mike...back when I created pattern recognition one of my programmers had his PhD in math...often when I'd ask him for certain measurements or calcs...he'd say Mike that's not the right way to do it...so I'd let him do it the right way...then my way;) Well most (but not all) of the time my way worked better IMO. Think outside the box:) Even a Darvas Box:)))