Re: MT4 Multi Time Frame (MTF) Indicators

587
chris006 wrote: Wed Dec 11, 2019 6:22 am Well, the new RMI mtf does not seem to be consistent with the plain RMI.
The first subwindow is the old mtf, the 2nd subwindow the plain RMI and the 3rd subwindow the new mtf
yes u are right.............. i think maybe different average used to calculate new one?? not sure but let us see for mrtools will check later................. :thumbup:
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Re: MT4 Multi Time Frame (MTF) Indicators

588
chris006 wrote: Wed Dec 11, 2019 6:22 am Well, the new RMI mtf does not seem to be consistent with the plain RMI.
The first subwindow is the old mtf, the 2nd subwindow the plain RMI and the 3rd subwindow the new mtf
Yes your right after a bit of research only thing I could find that made sense was that the Rmi is actually a momentum smoothed Rsi and that if you put a Rmi period 14 and momentum period 1 of close price it should be the same as a 14 period Rsi of close price and looks like the original one is exactly like Rsi with those settings and made this one the same. Guess will go with that until I find something different.
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Re: MT4 Multi Time Frame (MTF) Indicators

589
mrtools wrote: Wed Dec 11, 2019 1:30 pm

Yes your right after a bit of research only thing I could find that made sense was that the Rmi is actually a momentum smoothed Rsi and that if you put a Rmi period 14 and momentum period 1 of close price it should be the same as a 14 period Rsi of close price and looks like the original one is exactly like Rsi with those settings and made this one the same. Guess will go with that until I find something different.
ITS FIXED!!! WOOT :clap:
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Re: MT4 Multi Time Frame (MTF) Indicators

590
Thanks to Mrtools for fixing the mtf version to generate the same results as the plain RMI. (and to moey_dw)

Mrtools I cannot understand the code in the plain RMI (I see in the mq4 file of the plain RMI), but is the calculation in the mq4 file the same as the text below (is the calculation in the mq4 file using a five day calculation?):

"The formula to calculate RSI is based on the security's average one-day gain over the past X days divided by the average one-day loss over this same number of days (with 14 being a very popular value for X). Generally speaking, RSI values above 70 are viewed as an "overbought" indicator, wherein the stock is predicted to retrace some recent gains, while RSI values below 30 are considered "oversold," with the shares then expected to move off their lows.

The key differences in the RMI calculation as compared to its RSI counterpart are the time frame during which average gains and losses are measured, as well as the overall lookback period. Rather than comparing one-day gains and losses, a typical RMI calculation is based on the stock's average five-day gains over the past X days divided by the average five-day losses over this same period. And whereas 14 is the most popular "X" value for RSI, the RMI most frequently uses 20 for this variable."

the text is from schaeffersresearch com (how to put the link since no links are allowed?)

The whole text on that website reads as follows:
The Relative Momentum Index (RMI) -- a moving average-based overbought/oversold indicator that can remain overbought or oversold for much longer periods than its fellow members of the oscillator family -- is a factor we often consider when forming trade recommendations. Unlike the more commonly observed Relative Strength Index (RSI), which measures short-term instances in which stocks are overbought (or oversold) that might cause a temporary interruption in the prevailing trend, a high RMI level can often be an indicator of a positive price trend that can persist for many months.

As with the RSI, the value of the RMI oscillates between zero and 100. The calculations for the two indicators are essentially variations on a theme, with the security's average gains stacked up against its average losses to determine the general price trend.

The formula to calculate RSI is based on the security's average one-day gain over the past X days divided by the average one-day loss over this same number of days (with 14 being a very popular value for X). Generally speaking, RSI values above 70 are viewed as an "overbought" indicator, wherein the stock is predicted to retrace some recent gains, while RSI values below 30 are considered "oversold," with the shares then expected to move off their lows.

The key differences in the RMI calculation as compared to its RSI counterpart are the time frame during which average gains and losses are measured, as well as the overall lookback period. Rather than comparing one-day gains and losses, a typical RMI calculation is based on the stock's average five-day gains over the past X days divided by the average five-day losses over this same period. And whereas 14 is the most popular "X" value for RSI, the RMI most frequently uses 20 for this variable.

As with RSI, moves above 70 by the RMI could be considered "overbought," and drops below 30 "oversold" -- but, as noted above, RMI is more likely to flag bullish trends that have the legs to keep going, differentiating these signals from the short-term trend reversals which RSI is often used to pinpoint. In other words, RMI moves above 70 frequently correspond with strong bullish momentum in the underlying stock -- and as such, are often accompanied by a sustained period of upside price action (despite simultaneous overbought warnings from a number of other oscillator-type indicators).

Though we'll discuss a major caveat to these guidelines immediately below, here are the four major RMI trading signals, from our perspective:

A move from below to above 70 = Buy
A move below 70 = Close long positions (iffy whether or not you want to establish new short positions on this signal)
A move below 30 = Short
A move from below to above 30 = Cover shorts (iffy whether or not you want to establish new long positions on this signal)
Having said that, some names just seem to naturally trade for extensive periods on signals -- whether above 70 or below 30 -- and others tend to chop around almost as much on their RMI as on their RSI. Our strong lean for directional trading (especially options trading) is to try to focus on the former group, and avoid the latter group.


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