Technical Studies Reference


Rahul Mohindar Oscillator

This study calculates the system of indicators associated with the Rahul Mohindar Oscillator for the data specified by the Input Data Input.

Let \(X\) be a random variable denoting the Input Data, and let \(X_t\) be the value of the Input Data at Index \(t\). Let the Inputs Length 1, Length 2, Length 3, and Length 4 be denoted as \(n_1\), \(n_2\), \(n_3\), and \(n_4\), respectively. We begin by computing the following sequence of Simple Moving Averages.

\(MA^{(1)}_t(X,n_1) = MA_t(X,n_1)\)

\(MA^{(2)}_t(X,n_1) = MA_t(MA(X,n_1),n_1)\)

\(MA^{(3)}_t(X,n_1) = MA_t(MA(MA(X,n_1),n_1),n_1)\)

\(MA^{(4)}_t(X,n_1) = MA_t(MA(MA(MA(X,n_1),n_1),n_1),n_1)\)

\(MA^{(5)}_t(X,n_1) = MA_t(MA(MA(MA(MA(X,n_1),n_1),n_1),n_1),n_1)\)

\(MA^{(6)}_t(X,n_1) = MA_t(MA(MA(MA(MA(MA(X,n_1),n_1),n_1),n_1),n_1),n_1)\)

\(MA^{(7)}_t(X,n_1) = MA_t(MA(MA(MA(MA(MA(MA(X,n_1),n_1),n_1),n_1),n_1),n_1),n_1)\)

\(MA^{(8)}_t(X,n_1) = MA_t(MA(MA(MA(MA(MA(MA(MA(X,n_1),n_1),n_1),n_1),n_1),n_1),n_1),n_1)\)

\(MA^{(9)}_t(X,n_1) = MA_t(MA(MA(MA(MA(MA(MA(MA(MA(X,n_1),n_1),n_1),n_1),n_1),n_1),n_1),n_1),n_1)\)

\(MA^{(10)}_t(X,n_1) = MA_t(MA(MA(MA(MA(MA(MA(MA(MA(MA(X,n_1),n_1),n_1),n_1),n_1),n_1),n_1),n_1),n_1),n_1)\)

In the above relations, \(MA^{(j)}\) denotes the \(j-\) fold composition of Simple Moving Averages.

We also compute the Highest High and Lowest Low over \(n_2\) bars: \(\max(X,n_2)\) and \(\min(X,n_2)\)

We then denote the indicator Swing Trade 1 at Index \(t\) for the given Inputs as \(ST^{(1)}_t(X,n_1,n_2)\), and we compute it for \(t \geq 0\) as follows. No Subgraph is drawn for Swing Trade 1.

\(\displaystyle{ST^{(1)}_t(X,n_1,n_2) = \left\{\begin{matrix} 100\cdot\frac{X_t - \frac{1}{10}\sum_{j = 1}^{10}MA^{(j)}_t(X,n_1)}{\max_t(X,n_2) - \min_t(X,n_2)} & \max_t(X,n_2) - \min_t(X,n_2) \neq 0 \\ 0 & \max_t(X,n_2) - \min_t(X,n_2) = 0 \end{matrix}\right .}\)

For an explanation of the Sigma (\(\Sigma\)) notation for summation, refer to our description here.

We denote indicators Swing Trade 2 and Swing Trade 3 at Index \(t\) for the given Inputs as \(ST^{(2)}_t(X,n_1,n_2,n_3)\) and \(ST^{(3)}_t(X,n_1,n_2,n_3)\), and we compute them in terms of Exponential Moving Averages for \(t \geq 0\) as follows. The Subgraphs of Swing Trade 2 and Swing Trade 3 are both drawn for \(t \geq \max\{n_1,n_2,n_3,n_4\}\).

\(ST^{(2)}_t(X,n_1,n_2,n_3) = EMA_t\left(ST^{(1)}(X,n_1,n_2),n_3)\right)\)

\(ST^{(3)}_t(X,n_1,n_2,n_3) = EMA_t\left(ST^{(2)}(X,n_1,n_2),n_3)\right)\)

Swing Trade 2 and Swing Trade 3 are used to determine Buy and Sell signals. Let the Arrow Offset Percentage Input be denoted as \(k\).

A Buy Signal is indicated by an Up Arrow at Index \(t\) if the Subgraph of the Swing Trade 3 crosses the Subgraph of Swing Trade 2 from below. That is, a Buy Signal at \(t\) satisfies the conditions \(ST^{(3)}_{t - 1}(X,n_1,n_2,n_3) < ST^{(2)}_{t - 1}(X,n_1,n_2,n_3)\) and \(ST^{(3)}_t(X,n_1,n_2,n_3) > ST^{(2)}_t(X,n_1,n_2,n_3)\). The vertical coordinate of the tip of the arrow is given by \(ST^{(3)}_t(X,n_1,n_2,n_3) - \frac{k}{100}ST^{(3)}_t(X,n_1,n_2,n_3)\).

A Sell Signal is indicated by a Down Arrow at Index \(t\) if the Subgraph of the Swing Trade 3 crosses the Subgraph of Swing Trade 2 from above. That is, a Sell Signal at \(t\) satisfies the conditions \(ST^{(3)}_{t - 1}(X,n_1,n_2,n_3) > ST^{(2)}_{t - 1}(X,n_1,n_2,n_3)\) and \(ST^{(3)}_t(X,n_1,n_2,n_3) < ST^{(2)}_t(X,n_1,n_2,n_3)\). The vertical coordinate of the tip of the arrow is given by \(ST^{(3)}_t(X,n_1,n_2,n_3) + \frac{k}{100}ST^{(3)}_t(X,n_1,n_2,n_3)\).

Finally, we denote the Rahul Mohindar Oscillator (RMO) for the given Inputs at Index \(t\) as \(RMO_t(X,n_1,n_2,n_4)\), and we compute it for \(t \geq 0\) as follows. As with the Swing Trade 1 and Swing Trade 2 subgraphs, the RMO Subgraph is displayed for \(t \geq \max\{n_1,n_2,n_3,n_4\}\).

\(RMO_t(X,n_1,n_2,n_4) = EMA_t\left(ST^{(1)}_t(X,n_1,n_2),n_4\right)\)

The symbol in the chart is experiencing a Bull Trend when \(RMO_t(X,n_1,n_2,n_4) > 0\) and a Bear Trend when \(RMO_t(X,n_1,n_2,n_4) < 0\).

Inputs

  • Length 1
  • Length 2
  • Length 3
  • Length 4
  • Arrow Offset Percentage: This Input determines the distance that each arrow (up or down) is situated from its corresponding point of intersection of the Swing Trade 2 and Swing Trade 3 Subgraphs (below or above).
  • Input Data

Spreadsheet

The spreadsheet below contains the formulas for this study in Spreadsheet format. Save this Spreadsheet to the Data Files Folder.

Open it through File >> Open Spreadsheet.

Rahul_Mohindar_Oscillator.178.scss


*Last modified Thursday, 05th April, 2018.