Indicator translation to Pinescript requested by cookie_crusher on Twitter. The "RSI With Noise Elimination Technology" (NET) is an indicator developed by John Elhers.
The indicator is simply a rolling Kendall rank correlation coefficient of a normalized momentum oscillator (a version of the RSI introduced by Elhers in the May 2018 issue of Stocks & Commodities). It can be interesting to note that the absolute value of this oscillator is equal to the efficiency ratio used in the Kaufman adaptive moving average (KAMA).
Even if both the normalized momentum oscillator and rolling Rank correlation are scale-invariant oscillators, they do not have the same behaviors when increasing their settings, that is the normalized momentum oscillator scale range will become lower while the Kendall correlation will stay close to 1/-1, here is a closed-form approximation of the mean of the absolute value of the normalized momentum oscillator absolute value (efficiency ratio):
E(er) ≈ 1/√p
Where E(er) is the mean of the efficiency ratio er while p is the period of the efficiency ratio, as such the scale of the normalized momentum oscillator will shrink with a higher period, maybe that both are not intended to be plotted at the same time but that's what the original code does.
It's still a coll indicator. The link to J. Elhers article is in the code.
@stevenwalter0, Too true, though I cant let myself indulge in some Grover till Ive at least had my 3rd or 4th cup of deathly strong coffee or else i short circuit half way through the day. I have to also pep-talk myself before diving in....."its OK, this will be as easy as 1...2...3 x the coefficient of a tangented variable about to perform rocket surgery on a deathly ill hippopotamus".....DAMMIT GROVER!!!! See what you did. I KNEW i should have commented before trying to get through this. Bc thats all I can hope to ever do....JUST GET THROUGH THIS. Then Finally I get past the first line..."hey, this isnt so bad" (I continue reading)...."The indicator is SIMPLY a rolling Kendall rank correlation coefficient of a normalized momentum oscillator". FINE GROVER!!! You win this round...AGAIN. But next time Ill be prepared....to get through the 2nd line in the description.
alexgrover
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@chasinalts, This is gold! I am so sorry for causing so much pain xD Its not my intention to confuse or anything, well some of the posts I made are certainly more digest, I will try my best to make it sound simpler, no more rocket surgery on a deathly ill hippopotamus I promise :)
mohanee
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good one ,
can you please throw some light , how to use this indicator ?
kurtsmock
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@mohanee, In my opinion the output of this indicator behaves very similarly to the Stochastic RSI. Its definitely reduces the noise of the sRSI and it is scaled differently, but for all intents and purposes I imagine you would put this in the category of oscillators with the likes of the sRSI, Fisher's oscillator and other like instruments. That said, there might be value in adding a signal line to this (an SMA3 of the primary plot or something like that) since the noise reduction takes out most of the signals that you would be interested in taking out of the RSI. Great stuff @alexgrover. I always enjoy reading your stuff.
Pratik_4Clover
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This is going to be one of the most popular indicators on TV.
Thanks!
navyreal7
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good people, can you explain how to apply it? maybe there will be a test of the strategy or just explain what to look at in the indicator (intersections, range of what?) is there a significant function of eliminating noise in the RSI?
ICEKI
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Noise Elimination Technology that make this indicator so great; thank you so much for posting this for us <3