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U is the average of X day's closes UP and D is the average X days closes
down. Wilder recommends 14 days for the time period. (Note absolute values
are used for the calculation). I am not sure how you are defining "change of
up/down days" but it should be just the average.
If there were no down days I guess there would be a division by zero but
reality would say that the index is in the overbought area and the indicator
is theoretically approaching 100.
Pete Bock
-----Original Message-----
From: Heidi Stubner <stubner@xxxxxxxxxxxxx>
To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
Date: Monday, November 02, 1998 11:56 AM
Subject: Re: Relative Strength Index
>I'm trying to calculate how Equis comes up with the RSI figures. I've
>tried using the formula in the manual (100-(100/1+U/D)) where U = change of
>up days/time period and D= change in down days/time period.
>
>I'm coming up with at least a 5 point difference. I've contacted Equis and
>they indicated that the real formula is in Wilders book: New Concepts in
>Technical Trading Systems. Unfortunately she wasn't able to send me a copy
>of that formula. My Reuters RSI is also different from the Metastock #
>(and the # I'm coming up with).
>
>Is there someone who has a copy of his book and could either post the
>formula or could fax it to me? I'd appreciate it very much.
>
>One question is how they would adjust for a period where there were no down
>days during that time frame? Obviously you couldn't divide the # of up
>days by zero.
>
>Any assistance is greatly appreciated.
>
>Heidi
>
>
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