RSI (Relative Strength Index)
Momentum Indicator
RSI (Relative Strength Index)
RSI measures the speed and magnitude of price changes to identify overbought or oversold conditions.
Overview
The RSI oscillates between 0 and 100. Traditionally, readings above 70 indicate overbought conditions, while readings below 30 suggest oversold conditions. Divergences between RSI and price can signal potential reversals.
Use Case
Ideal for identifying overbought/oversold conditions and potential trend reversals.
Calculation
RSI = 100 - (100 / (1 + RS)), where RS = Average Gain / Average Loss