Calculating RSI on a Higher Timeframe from Lower-Timeframe Bars

Summary

This indicator method estimates a desired-period RSI on a chart whose bars are shorter than the target timeframe. It infers the chart bar duration and the number of lower-timeframe closes needed to form each higher-timeframe change, then separates gains and losses. The calculation averages those changes and applies the RSI transformation, with optional upper, center, and lower reference lines.

The document says the method supports target timeframes up to two hours. Three- and four-hour intervals can fail because the first bar of a day may have a different duration, disrupting the grouping. The chart timeframe must also be shorter than the requested higher timeframe. The supplied formula is implementation-specific and does not include validation against built-in RSI values, signal rules, or trading performance. It is therefore best read as an indicator construction example, with session boundaries and bar alignment as key limitations.

Key ideas

• The method derives higher-timeframe price changes by grouping lower-timeframe bars.
• It separates positive and negative changes before computing average gains and losses.
• The resulting relative strength value is converted to an RSI reading.
• The chart timeframe must be shorter than the target timeframe.
• The stated implementation is limited to target intervals of two hours or less because of irregular first bars.

Tags

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