An Augmented RSI Oscillator with Flexible Smoothing and Signal Crossovers

Summary

The document describes an augmented version of the Relative Strength Index. Its price-change calculation adjusts moves around recent highs and lows, while selectable smoothing methods are applied to both the directional change and its absolute value. A separately smoothed signal line provides another reference for interpreting momentum. The oscillator is presented on a 0–100 scale, with overbought and oversold zones and crossovers offered as possible signals.

Suggested uses include confirming momentum alongside a broader trend, looking for crossovers near an extreme zone, and comparing price swings with oscillator peaks and troughs for divergence. The settings let traders balance responsiveness against noise: shorter lookbacks react faster, while longer lookbacks or heavier smoothing tend to reduce signals and increase lag. The text gives no backtest, market-specific evidence, or performance statistics, and its signal descriptions should be treated as illustrative rather than proof of an edge. It also mentions code but provides no substantive script in the supplied material.

Key ideas

• The oscillator adjusts price changes around recent highs and lows before calculating a smoothed RSI-style reading.
• Separate smoothing choices are available for the oscillator calculation and its signal line.
• Crossovers near overbought or oversold zones are presented as possible momentum signals.
• Shorter lookbacks increase responsiveness but may also produce more noise.
• Trend alignment and divergence analysis are suggested, but the document provides no performance evidence.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.