[blackcat] L2 James Garofallou RSI In 4 Dim

5 May 2022

Level 2

Background

Traders’ Tips of September 2020, the focus is James Garofallou’s article in the September issue, “Tracking Relative Strength In Four Dimensions”.



Function
In “Tracking Relative Strength In Four Dimensions” in this issue, author James Garofallou introduces us to a new method of measuring the relative strength of a security. This new technique creates a much broader reference than would be obtained by using a single security or index and combines several dimensions, as the author calls them, into a single rank value. This study compares a security to another in four dimensions, as explained in the article. James Garofallou presents a metric for a security’s strength relative to 11 major market sectors and over several time periods. All this is squeezed into a single value. The first step is the RS2. It normalizes the security to a market index, then calculates four moving averages and encodes their relations in a returned number. I just modified it by using most BTC-correlated instruments to reflect how BTC response to their performance.


Remarks

This is a Level 2 free and open source indicator.

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