The Relative Momentum Index (RMI) is a technical analysis indicator used to measure the strength of a security's price relative to its past performance. It was developed by Roger Altman in the 1990s and is similar to the Relative Strength Index (RSI) but with some key differences. The RMI measures the ratio of upward price changes to downward price changes over a specified period, and it considers the momentum of both the up and down moves. This means that it is more sensitive to short-term price changes than the RSI, which only assumes the average gain and loss over a given period. The RMI oscillates between 0 and 100, with a reading above 70 indicating overbought conditions and below 30 indicating oversold conditions. Traders can use the RMI to identify potential trend reversals and confirm the strength of a current trend. A cross of the RMI and its signal line can also be used as a buy or sell signal.
