Why is RS_slow 5 and the fast RSI 14? Shouldnt that be reversed?

Technical Analysis
1

Course Name: Python For Trading!, Section No: 3, Unit No: 20, Unit type: Exercise



Why is RS_slow 5 and the fast RSI 14? Shouldnt that be reversed?

2

The formula df['RSI'] = np.where(RolDown !=0,RolUp / RolDown,1) calculates standard RSI as such, so usually from price of 14 window length.

Whereas df['RSI_slow'] is named slow because the caluation df['RSI'].rolling(window=5).mean() applies a mean of length 5 over original RSI, hence it's slover than ogirinal indicator.



Simply put RSI(Price, 14) is faster than MEAN(RSI(14), 5).



Hope that makes sense.



T.

3

Hi Tomas,

This understanding is correct! 

Thanks for being active on the forum!

4

Hello Feddo,

The RSI is the relative strength indicator based on a 14-period window.

The RS_slow is a 5 period average of this RSI(14) to essentially give you a smoothed RSI signal and this smoothening is over the 5 periods. It is called slow since RS_slow is an average of 5 RSI(14) values and RSI(14) will be 'faster' than a collection of RSI(14) values.



The RSI(14) crossing over RSI_slow is considered as a signal subsequently.



Hope this helps!

Let me know if you have any doubts.