Thursday, May 19, 2011

the ratio for calculating RSI

the ratio for calculating RSI

Smoothing trick
If the waveshape of market prices were pure sinewave, cu will be sinewave in phase with prices and CU + CD in the denominator will sum a constant value. In this case it would make little difference whether the smoothing was done by RSI is a computer or whether smoothing was done before treatment is taken into account. As a practical matter, swings denominator of the calculation RSI often in sync with the numerator. It is important that if smoothing is done before taking the ratio for calculating RSI that same amount of delay to be introduced in the numerator and denominator to maintain their synchronization.

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