Rank: Member
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Joined: 11/10/2006(UTC)
Posts: 14
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Hi,
why when loading only 17 days of historical data and then plotting the RSI(14)`I get a competely different reading than when I load say one year of data...
Thanks for the help
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Rank: Advanced Member
Groups: Registered, Registered Users, Subscribers
Joined: 3/7/2005(UTC)
Posts: 1,346
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hey newtrader..... many indicators will have differing values if you load fewer bars.... it's the math..... be sure to take that into account when developing systems..... h
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Rank: Member
Groups: Registered, Registered Users
Joined: 11/10/2006(UTC)
Posts: 14
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Ok, but why?!
My understanding is we need a little more than 14 days to calculate RSI(14), so what will change the result when loading 2 years of historical data? The RSI formula will always take the first 14 days of data for day one RSI (to produce the first reading of RSI(14) on the fifteenth day of the historical data), then; and for the following day it will take the next 14 days of data and drop the first day of yesterday's calculation.
Appereciate your help.thanx
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Rank: Advanced Member
Groups: Registered, Registered Users, Subscribers
Joined: 3/7/2005(UTC)
Posts: 1,346
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hey newtrader...... it's not using 14 days/bars...... rsi is one of the indicators that builds on it's previous value..... and it's previous value was created using it's previous value which was created using its previous,,,,,,,, ..... so in a sense, every bar loaded in the chart is be used to calculate the current bars rsi(14).....
somewhat like the image you see created in a mirror when you place 2 equal sized mirrors directly across from each other.... it's the math.....h
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Rank: Member
Groups: Registered, Registered Users
Joined: 11/10/2006(UTC)
Posts: 14
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Hayseed, Thank you so much for clearing this issue fo me.
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