Dear Mladen and Mr.Tools,
I see there is a new things (for me) for a RSI development on a web, and he give the clue and formula to create it. can we create this new kind of RSI please.
this is what i found :
Extreme overbuy/oversell indicator (Multiple time-frame RSI)
In second example we will present an indicator that could be called “extreme overbought/oversell” indicator. It’s construction we will use RSI indicator to detect overbuy/oversell conditions occuring in different time frames. Overbuy signal will be generated when 14 bar RSI is above 70 and oversell will be generated when RSI is below 30. INnthe second step we will generate RSIs in every interval starting from 5 minute, through 10-, 15-, 20-, 25-, 30, 35- minute interval up to 360 minutes.
In the third step we will add 1 to the sum if RSI in given time frame is above 70, or subtract 1 from the sum if RSI in given time frame is below 30.
After calculating entire sum we will divide the result by number of components.
This will give us bounded indicator in -1… + 1 range, where values near -1 will signify extreme oversell and values near +1 will signify extreme overbuy.
In the figure above we can see daily chart of CSCO plus extreme overbuy/oversell (light gray) and its 7 day moving average (blue). As we can see from the chart smoothed MTRSI peaks and troughs precisely show ends of large up trend and down trend moves. One stunning feature of this indicator is clarity of trend-ending signals. This indicator is perfect for timing the exits. As many researches have shown good exit timing is often more important than entry timing.
In this figure above you can see another example of MTRSI with very clear signals of local maximums during the trend. Even more stunning is the divergence that develops in the middle of September when prices continue to rise and MTRSI makes two peaks in clear downtrend. These leading signals helped to get out of trade just at the very end of very nice up trend.
can you create this indicator please. Thank you,