How To Compute Relative Strength Index (RSI) using MATLAB?

by filiberto , in category: Third Party Scripts , 2 months ago

How To Compute Relative Strength Index (RSI) using MATLAB?

Facebook Twitter LinkedIn Telegram Whatsapp

1 answer

Member

by orpha , 2 months ago

@filiberto 

To compute the Relative Strength Index (RSI) using MATLAB, you can follow these steps:


Step 1: Define the period for RSI calculation (usually 14 days is used). Step 2: Load or create a vector of closing prices for the asset you want to calculate RSI for. Step 3: Calculate the price change between each adjacent day using the diff function in MATLAB. Step 4: Create two vectors, one for the gains (positive price changes) and one for the losses (negative price changes). Step 5: Calculate the average gain and average loss over the defined period using the mean function. Step 6: Calculate the Relative Strength (RS) using the formula RS = Average Gain / Average Loss. Step 7: Calculate the RSI using the formula RSI = 100 - (100 / (1 + RS)). Step 8: Plot the RSI values over time to analyze the asset's momentum.


Below is a sample MATLAB code snippet to calculate the RSI for a given stock's closing prices:

 1
 2
 3
 4
 5
 6
 7
 8
 9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
% Define the period for RSI calculation
period = 14;

% Load or create a vector of closing prices
closing_prices = [100, 102, 105, 103, 107, 108, 110, 109, 112, 115, 113, 116, 118, 120];

% Calculate price changes
price_changes = diff(closing_prices);

% Separate gains and losses
gains = price_changes;
gains(gains < 0) = 0;
losses = abs(price_changes);
losses(losses < 0) = 0;

% Calculate average gains and losses
avg_gain = mean(gains(1:period));
avg_loss = mean(losses(1:period));

% Calculate RS
RS = avg_gain / avg_loss;

% Calculate RSI
RSI = 100 - (100 / (1 + RS));

% Display RSI value
disp(['RSI value for the given closing prices is: ' num2str(RSI)]);

% Plot RSI values
figure;
plot(1:length(closing_prices), RSI);
xlabel('Day');
ylabel('RSI Value');
title('Relative Strength Index (RSI) Over Time');


By running this code in MATLAB, you will be able to calculate and plot the RSI for the given closing prices. You can further customize the code to analyze different assets or time periods as needed.