IndicatorsRSI

IndicatorsRSI refers to the Relative Strength Index, a widely used momentum oscillator in technical analysis. It measures the speed and magnitude of price movements to evaluate how strong recent gains or losses are, helping traders identify potential turning points, overbought and oversold conditions, and divergences from price action. In many charting platforms, RSI is exposed under the name indicatorsRSI as a configurable indicator.

Calculation and configuration: RSI is typically computed over a chosen period, commonly 14 periods. Gains and losses over this period are averaged (often using Wilder smoothing), and the relative strength RS is the ratio of average gain to average loss. RSI = 100 minus (100 divided by (1 plus RS)). The resulting values range from 0 to 100. The indicator can be calculated from different price sources, such as close prices or typical price, and the period can be adjusted to fit the trader’s horizon. Some implementations use alternative smoothing methods or multi-timeframe variants.

Interpretation and signals: Readings above 70 are frequently interpreted as overbought, while readings below 30 suggest oversold conditions; these thresholds can be adapted. A move through the 50 level or crossovers of overbought/oversold zones can indicate shifts in momentum. Divergence between RSI and price action may signal a weakening trend or a potential reversal. RSI is most effective when used with other tools, such as trend indicators or volume analysis.

Use and limitations: RSI helps gauge momentum and potential reversals, but it can produce false signals in range-bound markets. Shorter RSI periods increase sensitivity, producing more signals; longer periods yield smoother results but may lag. The indicatorsRSI is a standard tool across charting and trading platforms.