The Relative Strength Index (RSI) Calculator is an essential momentum oscillator used by traders and investors to measure the speed and change of price movements. This tool helps you quickly identify if an asset is overbought or oversold, providing valuable insights for potential reversals. Optimize your trading decisions with a clear understanding of market momentum.
Formula:
The Relative Strength Index (RSI) is calculated using the following two-step process:
- Step 1: Calculate Relative Strength (RS)
RS = Average Gain / Average Loss - Step 2: Calculate RSI
RSI = 100 - [100 / (1 + RS)]
Where:
- Average Gain: The average of upward price changes over a specified number of periods.
- Average Loss: The average of downward price changes over the same specified number of periods (expressed as a positive value).
- Period (N): The number of trading periods used in the calculation (commonly 14).