Relative Trend Index: Volatility-Adjusted Price Range and Signal Average
Summary
The Relative Trend Index (RTI) is presented as a normalized indicator for gauging price position and trend strength. The described calculation estimates standard deviation over a short window, adds and subtracts that value from closing price to form upper and lower series, then finds their highest and lowest values across a longer trend window. Current close is scaled between those bounds to produce an index reading. An exponential moving average of the index is plotted as a signal line, alongside a midpoint and overbought and oversold reference levels.
The source characterizes RTI as responsive to volatility while reducing the influence of short-term fluctuations, and says it combines trend-following and mean-reverting qualities. However, it gives no backtest, explicit trading rules, parameter-selection study, or evidence supporting those performance claims. Although the text mentions percentiles as part of the indicator's statistical background, it clarifies that the shown version instead uses window highs and lows. Traders would need to define interpretation and risk controls themselves; the provided indicator is not a complete strategy.
Key ideas
- RTI scales closing price between the highest upper trend value and lowest lower trend value over a selected window.
- The upper and lower trend series are formed by adding or subtracting a standard deviation estimate from close.
- An exponential average of RTI acts as a signal line, with midpoint and threshold references also shown.
- The described version uses window extremes rather than percentiles, and the source provides no backtest or complete trading rules.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.