Returns
A numeric value containing RSI for the current bar.
Usage
The first usage is with tops and bottoms. The Index will usually top out or bottom out before the actual market top or bottom, giving an indication that a reversal or at least a significant reaction is imminent.
The second usage is with chart formations. The RSI line will sometimes form patterns such as head and shoulders tops or bottoms, pennants or triangles which indicate breakouts and buy and sell points.
The third usage is called Failure Swings. These swings occur when the RSI tops out or bottoms out, retraces slightly to what is known as the fail point, shows some indecision (sideways movement) and then retraces pass the fail point.
The fourth usage is Support and Resistance. Areas of support and resistance often show up clearly on the index before becoming apparent on the bar chart.
The fifth and final usage Wilder points out is Divergence. Divergence is a phenomenon where the RSI is moving in the opposite direction of price.
Although Wilder uses fourteen for the period and Close for the price in his work, Omega Research gives you the flexibility to modify these parameters. The parameter PRICE is usually hard coded with some bar attribute such as Close, Open, High, Low, and Volume or is replaced with a numeric series type input. However, it can be replaced with a valid EasyLanguage expression, for example, Close + Open or Average(RSI(Close,14),14).
The parameter LENGTH, just like PRICE, can be hard coded or replaced with an numeric simple type input. The value hard coded or entered as a default value for the input is usually number such as 5, 10, 14 etc. Once again, you may choose to replace LENGTH with a valid numeric expression. If you do decide to make it a numeric expression, keep in mind that the value returned for the parameter LENGTH should be a whole number and cannot change on a bar-to-bar basis.
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