What is the RSI (Relative Strength Index) and How Is It Used?
The Relative Strength Index (RSI) compares the strength of a stock’s recent gains to the weakness of its recent losses and turns that information into a number that ranges from 0 to 100. The Relative Strength Index compares upward movements in closing price to downward movements over a selected period. This could be used for short cycles and for 21 or 25 days for the intermediate cycle. Relative Strength Index is smoother than the Momentum or Rate of Change oscillators and is not as susceptible to distortion from unusually high or low prices at the start of the window. It is also formulated to fluctuate between 0 and 100, enabling fixed Overbought and Oversold levels. The term “Relative Strength Index” appears to be slightly misleading as the RSI only figures out the internal strength of a single security, but does not compare the strength of two securities on any such parameters discussed. The Relative Strength Index (RSI) is a financial technical analysis oscillator showing price str
