mrtools wrote: Tue Nov 19, 2024 9:22 am
RMI (Relative Momentum Index) with Laguerre Filter
This is another idea from Tradingview, not sure if I translated it correctly but looks okay anyway. It a Laguerre Rmi, a Laguerre using Rmi instead of Rsi. It also includes "Trend" mode for traders who prefer the indicator to color during a strong trend, instead of signal that a reversal may be ahead.
What is the RMI?
The Relative Momentum Index (RMI) is variation of the Relative Strength Index (RSI) but, unlike the RSI, which focuses solely on consecutive price changes, the RMI incorporates momentum over a flexible lookback period. This approach further aids in identifying potential reversals as well as filtering out market noise.
The RMI evaluates the momentum of price fluctuations over a designated timeframe, rather than just merely assessing the extent of price changes as the RSI does.
What does the Laguerre Filter do?
The Laguerre filter is classified as an Infinite Impulse Response (IIR) filter, utilized for the purpose of signal or data smoothing. This filter enables the application of variable smoothing to a signal through the adjustment of its "pole position", thereby allowing for the management of the trade-off between smoothness and delay according to individual preferences.
It serves as an alternative to basic moving averages, offering improved preservation of the original signal's shape.