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

, in category: Third Party Scripts , 5 months ago

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

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by orpha , 5 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.