|
PureBytes Links
Trading Reference Links
|
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?
------------------------------------
Yahoo! Groups Links
<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/equismetastock/
<*> Your email settings:
Individual Email | Traditional
<*> To change settings online go to:
http://groups.yahoo.com/group/equismetastock/join
(Yahoo! ID required)
<*> To change settings via email:
equismetastock-digest@xxxxxxxxxxxxxxx
equismetastock-fullfeatured@xxxxxxxxxxxxxxx
<*> To unsubscribe from this group, send an email to:
equismetastock-unsubscribe@xxxxxxxxxxxxxxx
<*> Your use of Yahoo! Groups is subject to:
http://docs.yahoo.com/info/terms/
|