Relative Opening Strength Index (ROSI)
factor.formula
ROSI(N) =
in:
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The time window length indicates the number of historical trading days used to calculate the indicator. The default value is usually 20, but it can be adjusted according to different markets and strategies. Smaller N values are more sensitive to price fluctuations, while larger N values are smoother and reflect longer-term trends.
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The sum symbol indicates the sum of daily data within the time window N. i represents each day, from the earliest day 1 to the most recent day N.
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The highest price on the ith day. It represents the highest level at which bullish forces attempt to push up prices on that day.
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The opening price of the i-th day. It represents the price at the beginning of the day's trading and is the starting point of the day's game between long and short parties.
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The lowest price on the ith day. It represents the lowest level at which the short side forces tried to push down the price on that day.
factor.explanation
The Relative Open Strength Index (ROSI) is designed to measure the relative strength of the market's bulls and bears around the opening price over a specific time period. It evaluates the strength of market sentiment by calculating the cumulative sum of the difference between the daily high and the opening price (representing the bulls' strength) and the cumulative sum of the difference between the opening price and the lowest price (representing the bears' strength). The indicator assumes that the opening price is the equilibrium point of the game between the bulls and bears on that day, while the high and low prices represent the extreme strength of the bulls and bears respectively. The higher the ROSI value, the stronger the bulls are on that day, and vice versa. The indicator can help traders identify changes in buying and selling pressure in the market in the short term and assist in determining potential reversal points in prices. In particular, the indicator has a certain reference value for intraday trading and short-term momentum strategies.