Adaptive RSI Using Filtered Prices and Discontinued Signal Lines
Summary
This indicator changes two parts of a conventional RSI setup. First, it filters prices with a selectable moving average before calculating RSI, aiming to reduce false signals without adding substantial lag. Second, it assesses trends with Discontinued Signal Lines instead of relying on RSI slope or fixed threshold levels. Those lines create significant levels that adjust as market conditions and RSI values change, so the indicator adapts its reference levels rather than transforming the RSI itself.
The document says that the usual built-in average types are supported for price filtering. Setting the average period to one makes the calculation equivalent to a regular RSI. It gives no formula for the Discontinued Signal Lines, parameter guidance, chart examples, or test results. The claimed reduction in false signals and limited lag are not quantified, and no trading rules are specified. Users would need to evaluate the filtering and adaptive levels across their instruments and timeframes.
Key ideas
- The indicator calculates RSI from filtered prices rather than unfiltered prices.
- Price filtering is intended to reduce false signals without adding much lag.
- Discontinued Signal Lines provide market-adjusting reference levels for trend assessment.
- An average period of one produces a regular RSI, according to the document.
- No empirical results or explicit trading rules are provided.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.