What does RSI stand for?

The relative strength index (RSI) is a momentum indicator used in technical analysis that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price...

What are the benefits of using RSi?

What Are the Benefits of Using RSI? As stated above, RSI charts can help you predict how an asset or market will perform. In general, if you see an overbought, or overvalued, condition, you can expect that there will be a corrective decline in price soon. Oversold, or undervalued, conditions signal that a price increase could be coming.

How to calculate RSI?

To calculate RSI even more precisely, you can use previous averages when determining current average gain or loss: RSI values above 70 indicates that an asset is becoming overbought and the market is bullish, while an RSI reading below 30 indicates that an asset is becoming oversold and the market is bearish.

How many periods do you use to calculate RSI?

The standard is to use 14 periods to calculate the initial RSI value. For example, imagine the market closed higher seven out of the past 14 days with an average gain of 1%. The remaining seven days all closed lower with an average loss of -0.8%.