Description
The Relative Momentum Index (RMI) is a variation of the Relative Strength Index (RSI). Instead of counting up and down days from Close to Close (like the RSI does), the Relative Momentum Index counts up and down days from the Close relative to a Close several days ago.
As with all overbought/oversold indicators, the RMI exhibits similar strengths and weaknesses. In strong trending markets, the RMI will remain at overbought or oversold levels for an extended period. In non-trending markets, the RMI tends to predictably oscillate between an overbought level of 70 to 90 and an oversold level of 10 to 30. When the RSI diverges from the price, the price will eventually correct to the direction of the index.
Input Parameters
| Parameter | Description |
|---|---|
length
|
The number of bars used to calculate the RMI. |
momentum
|
The number of bars to go back to find the past closing price. |
Plots
| Plot | Description |
|---|---|
RMI
|
The Relative Momentum Index. |
OverBought
|
The overbought level. |
OverSold
|
The oversold level. |
Example*
*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.