JoymistaWhat Is the RSI Indicator and How Is It Calculated?
RSI is a momentum indicator that moves between 0 and 100, with a default of 14 candles; readings above 70 are called overbought and below 30 oversold.
Explained
RSI = 100 − 100 ÷ (1 + RS), where RS is the average gain divided by the average loss. Overbought does not mean price must fall; in a strong trend RSI can stay above 70 for a long time. Many traders also use it to spot divergence and the 50 level.
Example
Example with made-up numbersAn average gain of 2 and an average loss of 1 give RS = 2, so RSI = 100 − 100 ÷ 3 ≈ 66.7.
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Open in JoymistaEducational content, not investment advice.