Normalized RSI - MetaTrader 5 Script - MQL5 #21618 - MT4/MT5 Resources

Some indicators work equally for all calculation lengths, some do not. This is not the case with RSI. Although it is taken for granted that it oscillates in the 0-100 range (so it is standardized) and regardless of its obvious usefulness, every serious study emphasizes that the length of the RSI should not exceed 10.

The "RSI problem" is simple: the longer the calculation period, the flatter the RSI becomes. Here is an example of a 50 period RSI:

Obviously, with such a long calculation period, it's almost unusable for anything in the original. There are quite a few attempts to change this: smoothing the RSI (partially avoiding this pitfall, but it quickly loses its advantage over the standard RSI), the inverse Fisher transform of the RSI (which also flattens out after a while - here's a comparison of the RSI 50 and the inverse Fisher transform of the RSI 50), etc.

This is another way to achieve this goal. Here's an example of the same RSI as above, but "normalized" to the -50 to +50 range:

Some of the issues observed have been resolved and, most importantly, the "flattening" problem no longer exists.

PS: Some experimentation is recommended (as usual when it comes to such "experiments").

Attachment download

📎 normalized_rsi.mq5 (10.51 KB)

Source: MQL5 #21618