Relative Strength Index (RSI)
Last updated
Last updated
J. Welles Wilder, the creator of several indicators, also developed the RSI, which is one of the most popular, useful momentum oscillators. It compares the size of the most recent profits with the size of the most recent losses, which means that it assesses the relationships between the up and down closing prices. The values are shown between 0 and 100.
Traditionally, and according to Wilder, RSI is considered overbought when above 70 and oversold when below 30. Signals can also be generated by searching for divergences, failure swings and centerline crossovers. RSI can also be used to identify the general trend. These traditional levels can also be adjusted to better fit the security or analytical requirements. Raising overbought to 80 or lowering oversold to 20 will reduce the number of overbought/oversold readings. Short-term traders sometimes use 2-period RSI to look for overbought readings above 80 and oversold readings below 20.
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When using this method with an index (e.g. RSI(14,3)[int barsAgo] ), the value of the indicator will be issued for the referenced bar.
inSeries Input data series for the indicator
period Number of bars included in the calculations
smooth Number of periods for the smoothing