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Re: Welles Wilder's Relative Strength Index (RSI)


  • To: <metastock@xxxxxxxxxxxxx>
  • Subject: Re: Welles Wilder's Relative Strength Index (RSI)
  • From: "A.J. Maas" <anthmaas@xxxxxx>
  • Date: Mon, 2 Aug 1999 15:45:08 -0700
  • In-reply-to: <LMBBKJCLKIJIBBJLAEIJGEIGCHAA.nkormanik@xxxxxxxxxx>

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<DIV><FONT size=2><FONT size=2>
<DIV><FONT size=2>The formula for calculating the RSI is: 
<BR>rsi=100-(100/(1+rs))</FONT></DIV>
<DIV><FONT size=2>where:</DIV></FONT>
<DIV><FONT size=2>rs = average of x day&#8217;s up closes divided by average of x 
day&#8217;s down closes</FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV><FONT size=2>Or, as can also be read in the MS65-man (p. 488) 
:</FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV><FONT size=2>The RSI is a fairly simple formula, but is difficult to 
explain without pages of examples.</FONT>&nbsp;</DIV>
<DIV><FONT size=2>The basic formula is:</FONT></DIV>
<DIV><FONT size=2><BR>RSI=100-(100/(1+(U/D)))<BR></FONT></DIV>
<DIV><FONT size=2>Where:<BR>U&nbsp;=&nbsp;An average of upward price change. 
<BR>D&nbsp;=&nbsp;An average of downward price change. <BR>MetaStock prompts you 
to enter the number of time periods in the averages.</FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV>
<DIV><FONT size=2>This Custom RSI-formula printed below, too can be found on 
Equis' Website, but now on page</FONT></DIV>
<DIV><FONT size=2><A 
href="http://www.equis.com/customer/support/formulas/cf00075.html";>http://www.equis.com/customer/support/formulas/cf00075.html</A>&nbsp;</FONT></DIV>
<DIV>Equis' Bill Forman suggested its use, and was accompanied by a brief 
explanation, in an email</DIV>
<DIV>(Dated 19981102 - Subject: RE: Relative Strength Index) and as such his 
mail contained some</DIV>
<DIV>more additional info&nbsp;to what is already been printed on the -below- 
webpage itself.</DIV>
<DIV>&nbsp;</DIV>
<DIV>From eye-balling couldn't notice a difference between the on the 
"cf00075.html" page printed</DIV>
<DIV>formula and the on the "cf00098.html" printed formula (as suggested by 
Nicholas), but noticed</DIV>
<DIV>that the 75-version was parsed a little bit better and therefore easier to 
read (when working on</DIV>
<DIV>your own version, eg to do&nbsp;some changes).</DIV>
<DIV>Applying other indicators for underlying values, naturaly, will force you 
to do some work especially</DIV>
<DIV>to the&nbsp;"B:" function AND the further in "Z:" + "Y:" used underlays (eg 
here the O,H,L,C,V will have</DIV>
<DIV>to be replaced by f.i. a H-L range or just another indicator type like 
MACD() or etc. ................).</DIV>
<DIV>Note that the (by me added) at the end used "RSIV:" is an adjustment that 
is only "opticaly" required</DIV>
<DIV>here, for in the way that this formula source code is here written, it is 
not a straight RSI</DIV>
<DIV>&lt; but&nbsp;it is now written&nbsp;for an &gt; "Relative Strength Volume 
Index"-indicator.</DIV>
<DIV>&nbsp;</DIV></DIV>
<DIV><FONT size=2>Regards,<BR>Ton Maas<BR><A 
href="mailto:ms-irb@xxxxxxxxxxxxx";>ms-irb@xxxxxxxxxxxxx</A><BR>Dismiss the 
".nospam" bit (including the dot) when replying.</FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV>&nbsp;</DIV></FONT></FONT></DIV>
<DIV><FONT size=2>===========================================</FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV><FONT size=2><FONT size=2>Wilder uses his own form of "exponential" 
smoothing in his RSI.&nbsp; That is<BR>why the function "Wilders Smoothing" was 
added to version 6.5 of<BR>MetaStock for Windows 95 &amp; NT.&nbsp; Basically, 
on day 15 and all subsequent<BR>days, Wilder takes the previous average up close 
and multiplies it by<BR>13, add today's up close (if any) and divides that value 
by 14.&nbsp; He does<BR>the same with the average Down close.&nbsp; You then 
divide the ups by the<BR>downs, add 1.00 to it and divide that into 100 and then 
subtract that<BR>result from 100.&nbsp; You have the RSI.&nbsp; Note how he uses 
a value multiplied<BR>by 13 and divides by 14 for a 14 time period 
RSI.<BR><BR>To match this in a custom formula, you must use the "Wilders 
Smoothing"<BR>function.<BR><BR>Here is a custom formula to use other than the 
close in the calculation.<BR>It is posted on our web page.<BR><BR>Equis 
Support<BR>http://www.equis.com/<BR><A 
href="http://www.equis.com/customer/support/";>http://www.equis.com/customer/support/</A><BR>Please 
include previous email answers and questions in your response. 
<BR><BR></FONT></FONT></DIV>
<DIV><FONT size=2><FONT face="Times New Roman" size=5></FONT></FONT>&nbsp;</DIV>
<DIV><FONT size=2><FONT face="Times New Roman" size=5>Custom Relative Strength 
Index formula (for MetaStock 6.5 only)</FONT> </DIV>
<P></P>
<P>This formula will request the price data array to use when plotting. If you 
plan to use this in an exploration<BR>or system test, be certain you change the 
default time periods and price data array selection to the inputs<BR>you wish as 
the exploration or system test will not prompt for the input, it will use the 
default values.<BR>For more information, please review the sections in the 
MetaStock 6.5 manual on inputs and variables.</P>
<P>Q:=Input("Time Periods",1,1000,14);<BR><BR>B:=Input("Field: 1=Close, 2=Open, 
3=High, 4=Low, 
5=Volume",1,5,1);<BR><BR>Z:=If(B=1,Wilders(If(ROC(C,1,$)&gt;0,ROC(C,1,$),0),LastValue(Q)),</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp; 
If(B=2,Wilders(If(ROC(O,1,$)&gt;0,ROC(O,1,$),0),LastValue(Q)),</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp; 
If(B=3,Wilders(If(ROC(H,1,$)&gt;0,ROC(H,1,$),0),LastValue(Q)),</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp; 
If(B=4,Wilders(If(ROC(L,1,$)&gt;0,ROC(L,1,$),0),LastValue(Q)),</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wilders(If(ROC(V,1,$)&gt;0,ROC(V,1,$),0),LastValue(Q))))));<BR><BR>Y:=If(B=1,Wilders(If(ROC(C,1,$)&lt;0,Abs(ROC(C,1,$)),0),LastValue(Q)),</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If(B=2,Wilders(If(ROC(O,1,$)&lt;0,Abs(ROC(O,1,$)),0),LastValue(Q)),</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp; 
If(B=3,Wilders(If(ROC(H,1,$)&lt;0,Abs(ROC(H,1,$)),0),LastValue(Q)),</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp; 
If(B=4,Wilders(If(ROC(L,1,$)&lt;0,Abs(ROC(L,1,$)),0),LastValue(Q)),</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 
Wilders(If(ROC(V,1,$)&lt;0,Abs(ROC(V,1,$)),0),LastValue(Q))))));<BR><BR>RS:=Z/Y;<BR>RSIV:=100-(100/(1+RS));<BR>RSIV</P><!---END MAIN PAGE---></FONT>
<DIV><FONT size=2>===============================================</FONT></DIV>
<DIV><FONT size=2></FONT>&nbsp;</DIV>
<DIV><FONT size=2>----- Original Message ----- </FONT></DIV>
<DIV><FONT size=2>From: Nicholas Kormanik &lt;<A 
href="mailto:nkormanik@xxxxxxxxxx";>nkormanik@xxxxxxxxxx</A>&gt;</FONT></DIV>
<DIV><FONT size=2>To: &lt;<A 
href="mailto:metastock@xxxxxxxxxxxxx";>metastock@xxxxxxxxxxxxx</A>&gt;</FONT></DIV>
<DIV><FONT size=2>Sent: zondag 1 augustus 1999 2:12</FONT></DIV>
<DIV><FONT size=2>Subject: RE: Welles Wilder's Relative Strength Index 
(RSI)</FONT></DIV>
<DIV><BR></DIV><FONT size=2>&gt; Glen,<BR>&gt; <BR>&gt; Perhaps you can extract 
it from the following formulation:<BR>&gt; <BR>&gt; <A 
href="http://www.equis.com/customer/support/formulas/cf00098.html";>http://www.equis.com/customer/support/formulas/cf00098.html</A><BR>&gt; 
<BR>&gt; Best of luck,<BR>&gt; Nicholas<BR>&gt; <BR>&gt; <BR>&gt; <BR>&gt; 
</FONT></BODY></HTML>
</x-html>From ???@??? Mon Aug 02 16:18:28 1999
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From: "Nicholas Kormanik" <nkormanik@xxxxxxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Subject: RE: Can I keep my 'ems'??
Date: Mon, 2 Aug 1999 16:21:22 -0600
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Status:   


Ton Maas,

"One can tell that your Config.sys line originates from a program (source)
other than that of your OS, eg Windows 98...."

Don't you just hate when they do that!!!  Nasty little critters adding lines
and not telling me about it!  I had no idea I could just go ahead and delete
those lines (keeping a backup, of course) in Win 98.  Do you think that
having these lines in there all this time has been in any way degrading
system performance?  (Though I'll probably be able to see for myself once
they are out.)

Thanks again for your help, and sorry to have been so off-topic.

Nicholas