Smoothing RSI with a Hull Moving Average

Summary

This short note describes filtering price with a Hull moving average before calculating the Relative Strength Index. RSI compares recent gains and losses to represent momentum and is often used to identify potentially overbought or oversold conditions. The author argues that smoothing the input prices produces a less reactive RSI and may reduce false signals, especially when RSI slope is used to infer trend direction.

The note gives no formula, parameter settings, chart examples, or tests to substantiate the claimed reduction in false signals. It cautions against treating RSI slope as a reliable trend signal and states that a Hull period of one or less yields ordinary RSI values. The approach is therefore a brief indicator modification rather than a defined trading strategy; it does not establish entry rules, exits, or evidence of profitability.

Key ideas

• The method applies a Hull moving average to prices before calculating RSI.
• The smoothing is intended to reduce RSI’s responsiveness and false signals.
• The note cautions that RSI slope alone is a poor basis for trend signals.
• A Hull period of one or less is said to produce unfiltered RSI values.
• No backtest or detailed parameter guidance is provided.

Tags

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