- June 9, 2013
- Posted by: Forex Wiki Team
- Category: FX Ind
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Author: | figurelli (2011.12.06 07:46) | ||
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The original RSI In my opinion, Welles Wilder RSI (Relative Strength Index) is a great momentum oscillator that works fine for small periods values (from 2 to 20).The proposed RSI The main idea of the proposed RSI is better detect the signal overbought/oversold situations using larger periods for better trend detection in any timeframe. For this, I did some changes to it performe as good for greater periods, like 120, introducing a gain variable. So, if you use 120 period in original Wilder RSI, you can inject a gain to see the graph as well as small periods. Parameters description: - period: original RSI period - gain: gain injected for greater periods better visualization Example 1: the advantage of larger periods using Wilder RSI gain injection in EUR/USD H1 - in the graph we have the two indicators comparison: Wilder RSI (blue) x Figurelli RSI (red) - our target is better detect signal points [1] and [4] - note that original RSI with period 14 detects points [3] and [6] are almost the same, but points [1] and [4] are very differents - in Figurelli RSI with period 120 and gain 10, we can see points [2] and [5] that better detect the signal overbought/oversold situations Example 2: the advantage of larger periods using Wilder RSI gain injection in EUR/USD D1 - same as example 1, in the graph we have the two indicators comparison: Wilder RSI (blue) x Figurelli RSI (red) - our target is better detect signal points [1], [2] and [3] - note that for Wilder RSI point [1] is oversold, while in Figurelli RSI point [2] is oversold Adjustment tips: - if you use gain 1 the Figurelli RSI will be equal to Wilder RSI - if you increase your period, tries to increase the gain, so for 120 period you can try gain 10 to better see the great Wilder RSI visibility even in greater periods |