| rgevans |
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| Saturday, February 18, 2006 |
| Thursday, October 19, 2006 6:06:51 PM |
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Hi Craig
I have tried Jim's formula and this seems to give broady similar results to your original. Some of the minor swings which are within the chart area seem to be more accurate in terms of their relative positions to other points on the chart, and this is an improvement, however the main problem is still the truncating of the extreme turning points, and this appears to be almost identical. The oscillator will normally move between +100 and 0 with overbought and oversold horizontal lines at +70 and +30. I think you are pretty close to solving this. Other than the extreme positions the central portion of the graph looks about right and in line with what I am getting on my Metastock software
Thanks for your help guys
Regards
Gordon
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Hi Craig
Thanks for your effort on the momentum index. I have looked at it and it appears almost right...well done
The main problem seems to be that the top and bottom extremes of the oscillating curve seems to be truncated quite frequently and this is an important aspect since it helps to define entry points relative to previous extremes. If you could correct this I think this would do it. If you could then do the same for the 14/5 line that would be wonderful.... thanks again for your help
Regards
Gordon
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Thanks for your reply Craig... Below are the parameters I am using plus some basic info on RMI which might be of use...
Regards
Gordon
Relative Momentum Index
The Relative Momentum Index (RMI) was developed by Roger Altman. Impressed with the Relative Strength Index's insensitivity to the number of lookback periods, yet frustrated with it's inconsistent oscillation between defined overbought and oversold levels, Mr. Altman added a momentum component to the RSI. The RMI was first introduced in the February 1993 issue of Technical Analysis of Stocks & Commodities magazine.
As mentioned, the RMI is a variation of the RSI indicator. Instead of counting up and down days from close to close as the RSI does, the RMI counts up and down days from the close relative to the close x-days ago
(where x is not necessarily 1 as required by the RSI). So as the name of the indicator reflects, "momentum" is substituted for "strength."
See page 149 for more information on plotting indicators. See page 180 for more information on the Relative Momentum Index parameters.
Interpretation
As an oscillator, the RMI exhibits the same strengths and weaknesses of other overbought/oversold indicators. During strong trending markets the RMI will remain at overbought or oversold levels for an extended period. However, during non-trending markets, the RMI tends to oscillate predictably between an overbought level of 70 to 90 and an oversold level of 10 to 30.
Since the RMI is based on the RSI, many of the same interpretation methods can be applied. In fact, many of these "situations" are more clearly manifest with the RMI than they are with the RSI.
Tops and Bottoms. The RMI usually tops above 70 and bottoms below 30. The RMI usually forms these tops and bottoms before the underlying price chart.
Chart Formations. The RMI often forms chart patterns (such as head and shoulders or rising wedges) that may or may not be visible on the price chart.
Failure Swings. (Also known as support or resistance penetrations or breakouts.) This is where the RMI surpasses a previous high (peak) or falls below a recent low (trough).
Support and Resistance. The RMI shows, sometimes more clearly than the price chart, levels of support and resistance.
Divergence. As discussed above, this occurs when the price makes a new high (or low) that is not confirmed by a new RMI high (or low).
Note that a 20,1 parameter RMI is equivalent to a 20-period RSI. This is because the 1-day momentum parameter is calculating day-to-day price changes, which the standard RSI does by default. As the momentum parameter is increased, the oscillation range of the RMI becomes wider and the fluctuations become smoother.
I am using two RMI indicators on the same graph with parameters as follows
First Indicator Second indicator
Time Period 6 14
Momentum 7 5
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Hi
I am currently in the process of reviewing your software prior to possibly subscribing to your services. At the moment I have a version of Metastock on my PC which has an indicator called Relative Momentum Index. I cannot so far find any reference to this on your website, could you please tell me if,in fact this is available on your software
Regards
Gordon
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