Filtering RSX Signals with a Step Chart and Price Averages
Summary
This indicator description presents a step-chart version of RSX, the Relative Strength Quality Index, intended to reduce the number of signals and make changes easier to interpret. The user sets a step size as a percentage of RSX; changes smaller than that threshold are treated as insignificant. Changes in the step bar’s color can be used as signals.
The indicator can also smooth price before the stochastic calculation used for RSX. It offers simple, exponential, smoothed, and linearly weighted moving averages, allowing price smoothing and the RSX step threshold to act as two successive filters. The description explains the design and possible signal reading but provides no parameter guidance, backtest, or evidence that it reduces false signals or improves trading results. The indicator’s performance may depend on the market, chosen step size, and averaging method.
Key ideas
- A configurable RSX step threshold filters out changes smaller than the chosen percentage.
- Step-bar color changes are presented as potential trading signals.
- Price can be averaged before the stochastic calculation using one of four moving-average types.
- The description gives no test results or guidance for selecting parameters.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.