Smoothed RSI Based on Moving-Average Price Differences

Summary

This indicator adapts the RSI calculation by first comparing the close with a configurable moving average of a selected price series. Positive and negative differences are separated into gain and loss inputs, then each side is smoothed with a configurable moving-average method and period. The resulting ratio is transformed to an oscillator on the familiar zero-to-one-hundred scale, with configurable upper and lower reference levels.

The description highlights an unusual behavior: it says the smoothed RSI rises when price falls and falls when price rises, the reverse of the usual intuition for standard RSI. It lists settings for the source period, source method, applied price, smoothing period and method, and threshold levels. No trading rules, comparative tests, or evidence about the indicator’s predictive value are given, so the text explains its construction rather than establishing its usefulness as a signal.

Key ideas

• The indicator derives gains and losses from differences between the close and a configurable moving average.
• Separate moving averages smooth positive and negative differences before the RSI transformation.
• The source series, averaging methods, smoothing period, and threshold levels are configurable.
• The description states that the indicator moves inversely to price changes.
• No signal rules or empirical validation are supplied.

Tags

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