RSI Smoothing with Alternative Averages and Crossover Signals
Summary
This document describes an RSI indicator that allows the user to choose among four types of smoothing averages for its calculation. It contrasts this flexibility with conventional RSI smoothing and notes that the indicator can use two additional moving averages applied to the RSI values. Those extra averages can be disabled by setting their periods to zero or less.
The suggested use is to pair a faster and a slower average, then consider their crossovers as potential signals. Smoothing is intended to filter abrupt changes in RSI and reduce false signals when RSI is used with threshold crossings. The document offers parameter suggestions but gives no backtest, market examples, or evidence that the crossovers improve performance. Its recommendations should therefore be treated as indicator configuration ideas rather than a validated trading strategy; signal quality and suitable settings may vary across instruments and market conditions.
Key ideas
- The RSI calculation can use four different smoothing average types.
- Two additional moving averages can be applied to RSI values as signal filters.
- Setting an average period to zero or less disables that average.
- The document suggests using faster and slower averages and watching for their crossovers.
- It provides configuration guidance but no performance tests or market-specific validation.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.