| Welcome Guest, please sign in to participate in a discussion. | Search | Active Topics | |
Registered User
Joined: 3/21/2005
Posts: 7
|
In Achelis' Technical Analysis from A to Z, he gives the formula for calculating the RSI. After using this method, I came up with different numbers from what you have. My question is: What is your method of calculating the RSI?
Thank you for your help, again.
|
|
Worden Trainer
Joined: 10/1/2004
Posts: 18,819
|
Are you talking about Relative Strength or Wilder's Relative Strength Index (RSI)?
- Craig
Here to Help!
|
|
Registered User
Joined: 3/21/2005
Posts: 7
|
I'm referring to Wilder's Relative Strength. In the Technical Analysis A to Z book, they give the basic formula. When I calculate the formula, the results do not match yours no matter what period I use, e.g. the standard 14 day or shorter one, 9 day. Evidently, I've missed a step so that's why I asked what method you use for your calculations. The more specific, the better.
|
|
Worden Trainer
Joined: 10/7/2004
Posts: 65,138
|
hfowler,
The basic formula for Wilder's RSI as given in most sources is:
100 - (100 / (1 + (U / D)))
A less obscure way to write this would be:
100 * U / (U + D)
Where:
U is a Moving Average of Upward Price Changes.
D is a Moving Average of Downward Price Changes.
TeleChart has two ways to calculate this base Wilder's RSI.
The first way is when Use Wilders Smoothing is checked and will agree with most other technical analysis software (and with the A-Z Companion Spreadsheet). In this instance, the Moving Average used to calculate U and D is a Wilder's Smoothing of the same Period as the RSI. Wilder's Smoothing is a type of Exponential Moving Average where the Period is different. You can multiply the Wilder's Period by two and then subtract one to get the equivalent Exponential Moving Average Period.
The second way is when Use Wilders Smoothing is not checked. When this is the case, the Moving Average used to calculate U and D is a Simple Moving Average of the same Period as the RSI.
TeleChart's RSI has additional Avg Period and Average Type settings that are not part of most RSIs. These simply add either a Simple or Exponential Moving Average with a Period equal to the Avg Period to the RSI as calculated above. If the Avg Period is set to 1, the RSI will act as if these settings are not there.
-Bruce
Personal Criteria Formulas
TC2000 Support Articles
|
|
Registered User
Joined: 1/1/2005
Posts: 2,645
|
hfowler,
I am guessing but the reason for the disagreement may be your interpretation of:
U - An average of upward price changes.
D - An average of downward price changes.
In calculating U, replace the the price change by zero if it is not an upward price change.
In calculating D, replace the the price change by zero if it is not an downwardward price change and change the sign of the downward price changes.
For example, if the price changes are:
+1, +2, +1, 0, -1, -2,
then, for simple moving averages,
U = 4/6
D = 3/6
The values
U = 4/3
D = 3/2
are not intended.
Thanks,
Jim Murphy
|
|
|
Guest-1 |