Relative Strength Index (RSI)

Relative Strength Index in Technical Analysis

Relative Strength Index (RSI) is one of the best known indicators used in technical analysis. It measures the relative strength of upside and downside moves in security prices.

Relative Strength Index Formula and Calculation

The formula of Relative Strength Index is:

RSI = 100 – 100 / ( 1 + RS )

where RS is Relative Strength (the ratio of average positive and negative moves).

A detailed explanation of Relative Strength and Relative Strength Index calculation is available here: RSI Calculation.

Relative Strength Index Value Range

RSI values

The Relative Strenght Index can reach values from 0 to 100. Values close to zero are a sign of declining (bearish) market; values close to 100 occur when prices are rising and the rises are greater than the declines. Here you can see more details about RSI value range.

RSI overbought and oversold

Most traders consider RSI overbought if it is greater than 80. Oversold Relative Strength Index is below 20. You can make these conditions more selective (e.g. 15 and 85 or 10 and 90) or more loose (e.g. 30 and 70).

RSI Calculation

This page is a detailed guide how to calculate Relative Strength Index (RSI). You can see how the formulas work in Excel in the RSI Excel Calculator. The calculation is explained in detail in chapter 4 of the calculator’s guide. RSI Calculation Formula RSI = 100 – 100 / ( 1 [more…]

RSI Value Range and Interpretation

RSI Value Range RSI (Relative Strenght Index) can reach values from 0 to 100. RSI Values Interpretation High RSI means that the second part of the RSI formula (behind the minus sign) is very small and RS is very large, which means that recent up moves have been much greater [more…]

RSI Period Length Effect

RSI Period Settings The period length parameter decides how stable or volatile RSI will be and how fast it will react to changing market conditions (up and down moves of new bars). Below you can find a few RSI charts (source: RSI Calculator). All charts are for the same market [more…]

RSI Overbought and Oversold Condition

RSI Is an Oscillator – Its Purpose Is to Make Things Simple RSI (Relative Strength Index) is one of the most widely used oscillators. Oscillators are indicators calculated from price and their main purpose is… (no, not to predict the future) … to simplify our view on price action by [more…]

RSI Overbought-Oversold with Confirmation

Relative Strength Index RSI (Relative Strength Index) is one of the most popular indicators. The most common way to trade with it is by looking at overbought and oversold areas. You buy when RSI says oversold and you sell when it says overbought. This approach is trading against the market [more…]

RSI Divergence

RSI Divergence RSI typically shows high values when the market is rising and low values when market is falling. However, while there are virtually no limits on where price can go (other than the price of zero), RSI value range is limited to 0 to 100. Furthermore, RSI measures the [more…]