Results
What is the Relative Strength Index (RSI)?
The RSI measures the speed and size of recent price moves on a scale of 0 to 100, by comparing average gains with average losses over a set number of periods. It was developed by J. Welles Wilder and is one of the most widely used momentum indicators.
RSI = 100 − 100 ÷ (1 + RS)
How to read it
- Above 70 is often read as overbought, meaning the price has risen quickly and may be due a pause or pullback.
- Below 30 is often read as oversold, meaning the price has fallen quickly and may be due a bounce.
- The RSI can stay above 70 or below 30 for a long stretch during a strong trend, so it is not a simple buy or sell signal on its own. Many traders also watch for divergence, where price makes a new high or low but the RSI does not.
Common questions
Why 14 periods?
14 is the length Wilder originally used and remains the default on almost every charting platform, though shorter lengths react faster and longer lengths are smoother. You can change it in Settings.
What is Wilder smoothing?
After the first average, each new average gain or loss is a weighted blend of the previous average and the latest value, giving older data a gradually fading influence rather than dropping out all at once like a simple moving average.
Why does the pane sit below the price chart?
The RSI is a 0 to 100 scale, not rupees, so it needs its own scale. The two panes are lined up by date and move together when you scroll or zoom.