Slow Relative Strength Index: Smoothed Price-Change Momentum Calculation

Summary

The document explains a Slow Relative Strength Index indicator, describing its inputs and calculation. The user selects a calculation period, smoothing period, applied price, and upper, middle, and lower reference levels. The indicator first smooths price with an exponential moving average, then updates average net change and average absolute change using a period-based smoothing factor. Their ratio is transformed into an index centered around 50.

This provides a compact description of how the indicator measures directional price change relative to total movement. The note names a 2015 publication as context but gives no test results, signal interpretation rules, or evidence that particular threshold crossings predict returns. The period, smoothing choice, and reference levels therefore remain configuration choices, and the document alone does not establish a trading strategy or its effectiveness.

Key ideas

• The indicator applies an exponential moving average to the selected price before measuring changes.
• It smooths net price change and absolute price change using a period-dependent factor.
• The ratio of net to total change is mapped to an index centered at 50.
• Overbought, middle, and oversold levels are configurable reference points, not validated trade rules in this description.

Tags

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