![]() The RSI indicator’s default calculation is 14 periods, the suggested value by Wilder in his book. In addition to this, an exponential moving average (EMA) is applied to its canvas, along with high and low levels marked at 70 and 30. For example, markets experiencing more upside momentum naturally have a higher RSI reading.Īs is evident from the image below, the indicator is basic in form, oscillating between 0-100. The RSI calculates momentum as a ratio of higher price closes over lower closes. ![]() Welles Wilder, and presented in his book New Concepts in Technical Trading Systems (1978), the RSI remains a prominent momentum oscillator – momentum is the rate of the rise or fall in price. Getting to know the RSI indicatorĭeveloped by J. Including, but certainly not limited to, the Slow Stochastic, The Moving Average Convergence & Divergence (MACD), Moving Averages and the Relative Strength Index (RSI) are well known among the technical community.įor the purpose of this piece, though, focus is drawn towards the RSI. The mammoth selection, however, tends to be detrimental, often leaving traders overwhelmed, particularly those in the earlier junctures of their journey.įortunately, a handful of indicators have stood the test of time. You could say you are almost spoilt for choice. Nowadays, popular trading platforms offer in excess of 100 indicators.
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