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Kev,
I've actually gotten lazy in my old age. I simply plot the RSI band formula on my charts and include a third band which is set to 50.
There is value in the raw value of the RSI so I don't smooth it. If I were to rescale the indicator, I would simply deduct 50 from it.
Preston
--- In equismetastock@xxxxxxxxxxxxxxx, "formulaprimer" <formulaprimer@xxx> wrote:
>
> Ok the neutral point you mention can be best viewed as a histogram of the RSI....
>
> RSI Histogram
> =========================
>
> PDS:= Input("Enter the number of Trend Periods:",3,50,14);
>
> (RSI(PDS) -50)/ Mov((Abs(RSI(PDS) - 50)),PDS,S);
>
> {END}
>
>
>
> --- In equismetastock@xxxxxxxxxxxxxxx, pumrysh <no_reply@> wrote:
> >
> > Kev,
> >
> > You are on the right track but the scaling on the RSI is not always constant. Walter Baeyans in his book titled RSI...Logic, Signals & Time Frame Correlation discusses this. Basically the RSI does not always move in a directly proportional manner. Page 22 of his book explains this. There is only one neutral point which is 50.
> >
> > Preston
> >
> >
> >
> > --- In equismetastock@xxxxxxxxxxxxxxx, "formulaprimer" <formulaprimer@> wrote:
> > >
> > > The way the RSI is calculated leads to the rethinking of the indicator itself that what the original designer intended it for.
> > > It is a momentum indicator but actually with the way it is constructed it is a TREND Indicator like ADX... Here is why
> > >
> > > RSI = 100 - [100/(1+(U/D))]
> > >
> > > Where:
> > >
> > > U = An average of upward price change.
> > > D = An average of downward price change.
> > >
> > > This means that 66.67 horizontal line and 33.33 horizontal lines are percentage indicators... If in a bull market 66.67 should be touched at least once and in a down bear trend 33.33 should be touched at least once. This is the reason why the default setting of 14 days is statistically relevant by the creator Wilder. Too sum it up in a bull market once the 66.67 level has been touched by the RSI it is statically a bull market until the 33.33 level is touched to signal a bear market... See if this analysis is correct?
> > >
> >
>
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