What RSI shows
A 0 to 100 reading of how strong recent gains are against recent losses. The standard length is 14.
Indicator guide · Oscillators
Relative Strength Index (RSI): what it shows, settings and how to read it.
A 0 to 100 reading of how strong recent gains are against recent losses. The standard length is 14.
How it is calculated
It compares the average gain of up-candles with the average loss of down-candles over the last N candles and turns the ratio into a number from 0 to 100.
Usual settings
Length 14 with lines at 70 (overbought) and 30 (oversold). Some traders use 80 and 20 in strong trends.
How traders read it
Above 70 is overbought and below 30 is oversold. Divergence (price makes a new high but RSI does not) warns that a move is tiring.
Where it fails
In a strong uptrend RSI can stay above 70 for weeks; overbought does not mean "sell now".
What to combine it with
A trend filter such as the 200 EMA, and support and resistance levels. Divergence between RSI and price is a popular warning sign.
Try RSI on a live chart
Sign in, open Genni Charts, press the "ƒx Indicators" button above the chart and choose RSI. Click its name on the chart to change the settings. It is free for every member.
More in "Oscillators": MACD · Stochastic · Stochastic RSI · CCI · Williams %R · ROC · All 25 indicators
Questions
Frequently asked questions
What is the RSI indicator?
A 0 to 100 reading of how strong recent gains are against recent losses. The standard length is 14.
What are the best settings for RSI?
The usual settings are: Length 14 with lines at 70 (overbought) and 30 (oversold). Some traders use 80 and 20 in strong trends. No setting is best in every market, so test a change on past data before relying on it.
Is RSI reliable on its own?
No single indicator is. In a strong uptrend RSI can stay above 70 for weeks; overbought does not mean "sell now". Most traders use it together with: A trend filter such as the 200 EMA, and support and resistance levels. Divergence between RSI and price is a popular warning sign.
How do I add RSI to a chart for free?
Sign in, open Genni Charts, press the "ƒx Indicators" button above the chart and choose RSI. Click its name on the chart to change the settings. It is free for every member.
This page is education, not investment advice. Trading involves substantial risk of loss. Read next: Trading indicators · Trading strategies · Candlestick patterns