The RSI is a \u00a0momentum indicator that helps in comparing the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset. It is calculated using the following formula:<\/p>\n
RS<\/strong> = \u00a0Average of x days’ up closes \/ Average of x days’ down closes<\/strong><\/p>\n The RSI usually ranges from 0 to 100. Once the RSI approaches the 70 level, an asset is deemed to be overbought, meaning that it may be getting overvalued and is a good candidate for a pullback. In the same way, if the RSI approaches 30, it is an indication that the asset may be getting oversold and therefore likely to become\u00a0undervalued.<\/p>\n A trader using RSI should be\u00a0aware that\u00a0large surges and drops in the price of an asset will affect the RSI by creating false buy or sell signals.\u00a0The RSI is best used as a valuable complement to other stock-picking tools<\/p>\n The RSI works best when compared to short-term\u00a0moving-average crossovers. Using a 10-day moving average with a 25-day moving average, you may find that the crossovers indicating a shift in direction will occur very closely to the times when the RSI is either in the 30\/70 or 20\/80 range, the times when it is showing either distinct overbought or oversold readings. Simply put, the RSI forecasts sooner than almost anything else an upcoming reversal of a trend, either up or down.<\/p>\n","protected":false},"excerpt":{"rendered":" The RSI is a \u00a0momentum indicator that helps in comparing the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset. It is calculated using the following formula: RS = \u00a0Average of x days’ up closes \/ Average of x days’ down closes The RSI usually […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[1],"tags":[6528,2245,6527],"class_list":{"0":"post-2426","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-general","7":"tag-concept-of-relative-strength-index","8":"tag-relative-strength-index","9":"tag-relative-strength-index-concept","10":"entry"},"_links":{"self":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts\/2426","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/comments?post=2426"}],"version-history":[{"count":0,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts\/2426\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/media?parent=2426"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/categories?post=2426"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/tags?post=2426"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}