Using Zero-Lag Moving Averages to Smooth RSI

Summary

This indicator note describes a variant of the relative strength index that uses a zero-lag moving average as its smoothing method. It presents this as an extension of the idea that different moving-average types can be used in RSI calculations. The stated motivation is to reduce the delay associated with conventional smoothing.

According to the document, the modified RSI reaches the 0 and 100 extremes more quickly and more often than regular RSI. It further claims this behavior can reduce the tendency of longer-period RSI calculations to linger near the midpoint around 50. The note gives a qualitative description, not formulas, parameter settings, charts, market examples, or performance comparisons. It does not establish whether the faster response improves trading decisions; reaching extremes more frequently may also change signal behavior. Traders would need to define and test their own interpretation of the indicator before relying on it.

Key ideas

• The indicator substitutes a zero-lag moving average for the usual RSI smoothing method.
• The proposed change is intended to reduce lag in the RSI calculation.
• The note says the modified RSI reaches 0 and 100 more frequently, including with longer periods.
• No formula, empirical comparison, or evidence of trading performance is provided.

Tags

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