Breakout RSI: A Volume-Weighted Price-Movement Oscillator

Summary

The document outlines a Breakout RSI (BRSI), an oscillator inspired by a published technical-analysis article. It names three inputs: the calculation period and overbought and oversold levels. Its calculation resembles the relative-strength index, using averages of positive and negative movement, but defines those movements from changes in a derived “breakout power” measure rather than directly from price gains and losses.

Breakout power combines a price estimate, a measure of candle direction relative to the prior open, and current plus prior volume. The change in breakout power is assigned to the positive or negative series according to whether it rose or fell, and the oscillator is then calculated from their averages. The document gives no trading rules for interpreting threshold crossings, nor any test results, market examples, or evidence of predictive value. It is therefore a description of an indicator’s construction, not a demonstrated strategy; implementation details and the behavior of the thresholds would need independent evaluation.

Key ideas

• BRSI applies an RSI-style formula to positive and negative changes in breakout power.
• Breakout power combines a price estimate, candle strength, and current and prior volume.
• The indicator uses a period plus overbought and oversold levels as inputs.
• The document does not specify entry rules or provide performance evidence.
• The indicator’s usefulness requires independent testing across markets and settings.

Tags

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