The was developed by Roger Altman and was introduced in his article in the February, 1993 issue of of Stocks & magazine.
While your typical counts up and down days from close to close, the counts up and down days from the close relative to a close x number of days ago. The result is an that is a bit smoother.
Use in the same way you would any other . There are overbought and oversold zones, and can also be used for divergence and trend analysis .
Grab the source code here: http://pastebin.com/LRVusQmy
Installation video by @ChrisMoody here : http://vimeopro.com/user14689865/tradingviewcom-how-to-videos
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I'd like as many people as possible to get it :)
study(title = "TheLark Relative Momentum Index (RMI)",overlay=false) //•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•// // // // RMI BY THELARK // // ~ 2-19-14 ~ // // // // •/• // // // // https://www.tradingview.com/u/TheLark // // // //•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•/•// // Relative Momentum Index (RMI) // "... The Relative Momentum Index was developed by Roger Altman // and was introduced in his article in the February, 1993 issue of // Technical Analysis of Stocks & Commodities magazine. " // "... While RSI counts up and down days from close to close, the Relative // Momentum Index counts up and down days from the close relative to a // close x number of days ago. " // Requested by glaz @ TradingView // inputs len = input(20, title="Length") mom = input(4, title="Momentum",minval=0) ob = input(70,title="Overbought") os = input(30,title="Oversold") c = close docol = input(true,title="Change Color?") dosignal = input(true,title="Show Signal Line?") sig = input(6,title="Signal Length") dohist = input(false,title="Show Hist?") //calc up = ema(max(c - c[mom],0),len) dn = ema(max(c[mom] - c,0),len) rmi = dn == 0 ? 0 : 100 - 100 / (1 + up / dn) signal = sma(rmi,sig) //plots hline(ob) hline(os) plot(dohist?(rmi-signal)+50:na,color=#FF006E,histbase=50,style=histogram,linewidth=2) plot(dosignal?signal:na,color=#D87A68) col = docol ? rmi > rmi ? #0094FF : #FF006E : #0094FF plot(rmi, color=col,linewidth=2)
The question relative RSI definition. Several years ago I wrote a piece of code, doing exactly what RSI defines: "... up and down days from close to close...".
If you do it by yourself and plot the indicator (not just using built-in function), you'll see completely different graph.
As I understood, the standard built-in RSI is some sort of approximation to the original definition.
*Where RS = Average of x days' up closes / Average of x days' down closes.
My interpretation of the difference is they need to accelerate the calculation to update only the newest point in real time, and use the rest of series from previous computations. That leads to screwing up of the original formula. I've seen the reference about modification to some book on www.marketwatch.com, but they changed the site and I can't find it.
As I remember, I did it for fun in IDL to see how RSI works on test functions, like a sum of 2 sines with different amplitudes and frequencies. The result was radically different.
I'll keep you posted if I find the reference. The sad thing people taking those indicators for granted.
I'm sure you would do it much faster than me with standard Pine tools.
As for me, the market is dynamical system (in mathematical sense), probably the system of coupled ordinary nonlinear differential equations with specific unpredictable forcing. We just need to study it's specific properties, like physicists study natural phenomena in laboratory conditions.