Dynamic momentum index
A variation of RSI whose lookback period automatically shortens or lengthens based on recent volatility, instead of using a fixed period.
What the numbers mean
Unlike RSI's fixed 14, the lookback moves: it shortens when volatility rises and lengthens when volatility falls, typically between 5 and 30 periods. The base number sets the midpoint of that range, and volatility is measured from the standard deviation of price.
- 14 — the base period the variable lookback centres on
- 5 — the shortest it typically becomes in high volatility (3 on some platforms)
- 30 — the longest it becomes in calm markets
- 5-day SD, averaged over 10 — the volatility measure that drives the change
- 70 / 30 — the same extremes as RSI
How it is used
Used exactly like RSI, with 70/30 extremes, but it reacts faster in fast markets and steadies itself in quiet ones, which reduces the lag complaint against fixed-period RSI.
- Read exactly like RSI, but it adapts to conditions automatically
- Faster in volatile markets, steadier in quiet ones
- Reduces the lag complaint against fixed-period RSI
How it relates to everything else
DYMI is RSI with its period driven by standard deviation, which makes it a hybrid of a momentum tool and a volatility tool. The cost is comparability: the same reading was produced by different lookbacks at different times, which makes historical comparison and back-testing harder to trust.
- RSI with a volatility-driven lookback
- Uses standard deviation to set its period
- Readings across time are not strictly comparable
What to watch for
A variable lookback means the same reading was produced by different calculations at different times, which makes the history harder to compare and back-tests harder to trust.