Relative Momentum Index This indicator aims at improving the data provided in the Relative Strength Index. (RSI). If the price reaches an area that is oversold, or overbought, it will improve the data. Roger Altman introduced the Relative Momentum Index in February 1993 in Technical Analysis of Stocks & Commodities magazine.
How to trade the Relative Momentum Index
The RMI indicator is a classic oscillator that moves in a range of 0 to 100. It allows traders to identify different formations and options to use in trading.
1- Highs and Lows
Relative momentum index crosses 70% from the above during an overall downtrend. This could be indicated using Multi Moving Average. It is a sign that the price should continue its downward trend. The RMI signals that the market is in an overbought area and further trends will be continued. If the indicator crosses the 30% mark from bellow during an overall uptrend it means that the price is in a short-term correction and can now continue its upwards movement.
Relative Momentum Index also forms graphical patterns like triangles, flags and head and shoulders that can be viewed by traders even though the pattern is not on the price charts.
3- Convergence and Divergence signals
The indicator, which is an oscillator shows signal convergence and divergence along the indicator line relative to the price action. These signals can be used to determine future trend strength and price behaviour.
How to Install and Download Relative Momentum Index
How to install your indicator on MT4 platform:
1. Click on the Download button below.
2. Save the file to your computer.
3. Extract and move the .ex4 file into the following folder : meta traderexpertsindicators.
4. Restart your Metatrader platform.
5. Click the “Indicators” button in the Metatrader toolbar.
6. Select “Custom”.
7. Search and select “RMI”.
8. Adjust settings or press OK to add the indicator to your selected chart.
Note: Relative Momentum Index is developed by Roger Altman and was sent by an AtoZ Markets follower from the United Kingdom, Tony. AtoZ Markets does not carry any copyrights over this trading tool.
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