Support Board
Date/Time: Wed, 12 Feb 2025 07:26:27 +0000
Post From: ADX Study
| [2020-10-02 09:51:07] |
| User90125 - Posts: 715 |
|
The RSI-W study uses the Wilder's Moving Average as the default and the RSI study uses the Simple Moving Average as the default.
Why? No CMT (Chartered Market Technician) uses an SMA as a default for RSI. In fact, there is NO literature supporting this non-standard usage in the RSI. The whole point, as demonstrated by Wilder, is to use an EMA, since it changes direction when price crosses it. This is fact, not conjecture. And the RSI would cross above or below 50 when this is the case. Wilder's Moving Average in the original is indeed an EMA with an alpha of 1/n. The generic Exponential Moving Average (which should be used as a default in the faster RSI study) also works as expected, given the observed qualities of an EMA, which in this case would have an alpha of 1/(2n - 1). Thus a 14-period Wilder is equivalent to a 27-period EMA. Whoever decided to use an SMA as default in the RSI is patently WRONG, if only because the SMA does not change (or bend, as it were), when price crosses it, thus altering the known and expected qualities of the RSI. |