The Relative Momentum Index(RMI) is a variation of the Relative Strength Index(RSI). The RMI counts up and down days from the close relative to close momentum-days ago, while momentum is limited to "1" in the RSI calculation.
The Relative Momentum Index was developed by Roger Altman and is first published in February,1993 issue of the “Technical Analysis of Stocks & Commodities” magazine.
As with all overbought/oversold indicators, the RMI exhibits similiar 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.
Calculation:
If Price> Price-Momentum then
Ups= Price - Price-Momentum, Downs=0
else
Downs= Price-Momentum - Price, Ups=0
Price -Momentum= The price momentum days ago
Inputs:
Price Field = Close
Indicates Open, High, Low or Closing price.
Period = 20
Indicates time period(the number of days for daily analysis, the number of weeks for weekly analysis, etc.).
Momentum = 5
Indicates the number of days used for comparison.
Indicator Type: Momentum