HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
XM information and reviews
XM
86%
Exness information and reviews
Exness
86%
FP Markets information and reviews
FP Markets
81%

Relative Strength Index


Relative Strength Index


The Relative Strength Index (RSI) is an oscillator that measures a particular financial instrument’s current relative strength compared to its own price history. The RSI should not be confused with relative strength which rates a financial instrument in relation to a market such as the S&P index.

The RSI is plotted on a vertical scale numbered from 0 to 100. The formula to calculate the RSI is 100-[100/(1+A)] where A is the average of the “up” closes over the calculation period divided by the average of the “down” closes over the calculation period. Recognia uses the popular 14-bar period in the calculation of the RSI. The “A” for a 14-day period is calculated by dividing the 14-day “up” close average by the 14-day “down” close average. An “up” close or a “down” close is defined as the absolute change in price from close to close.

Trading Considerations


The RSI sometimes shows more clearly than the price chart itself the support and resistance lines for a financial instrument. Failure Swings which are also known as support or resistance penetrations or breakouts can be detected by using the RSI. Failure swings occur when the RSI passes a previous high or falls below a recent low.

Divergences (when market trends go in a different direction than market indicators predicted, usually signifying the onset of a trend change) occur when the price makes a new high (or low) that is not confirmed by a new high (or low) in the RSI. Prices usually correct and move in the direction of the RSI.

A financial instrument is considered to be oversold when its RSI falls below 30 and overbought when its RSI rises over 70.

#source


RELATED

Mastering Stock Trading in Diverse Markets: A Deep Dive into Strategies and Nuances

Navigating the vast sea of stock trading is akin to art. The canvas of the stock market, with its myriad colors and shades, showcases a spectrum of opportunities...

Secrets of trading by Fibonacci levels

It is difficult to find a trader, even among newbies, who have never heard of Bill Williams - the developer of effective indicators integrated into almost every...

Achieve your trading goals with short-term investments

No trader enters global markets without a goal. The goal for many investors is the same: they are willing to catch trading opportunities. Yet each trader...

What Are The Bulls Power And Bears Power Indicators?

To make forex trading as productive as possible and to make trades more accurate, it is recommended to use technical tools, such as indicators. The choice of indicators directly depends...

Which Citizenship by Investment Programs are Crypto-Friendly?

With the evolution of the digital era, the crypto industry has taken the world by storm. In most countries, digital assets are considered a commodity rather than currency...

Forex Hedging: Shielding Your Business from Foreign Currency Risk

Forex hedging stands as a cornerstone of currency risk management, a strategic shield that businesses employ to safeguard themselves against losses arising from the unpredictable fluctuations in foreign exchange rates. In essence, it involves the acquisition of financial instruments or products to shield an enterprise from unforeseen shifts in exchange rates.

Trading in a Kimono or What Nikkei 225 Is

CFD trading in the stock market offers excellent opportunities for making money online. Moreover, unlike investors, a trader can make a profit not...

Living Through Economic Crisis: Top Hedging Instruments in 2022

There has been absolutely no doubt that the post-pandemic global economy will be recovering at a turtle pace. But instead of a gradual recovery, the economy has plunged into a rapidly...

How to Short Ethereum?

Want to profit from falling prices in ETH? Then you’re in the right place. In the following article, we’ll explain what shorting means, how to short Ethereum, and how you can profit...

Different ways of investing in gold in these modern times

Gold is a bright, yellow, malleable and ductile metal found in nature. It is usually found in rock veins, gold nuggets, grains, electrum or alluvial gold...

How to stake Ethereum

Ethereum is switching into a proof-of-stake consensus to allow the network to achieve scalability. Ethereum staking is when people lock up Ether (ETH) for a given time...

How to trade stocks

If you are unfamiliar with the stock market, then this trader's guide will assist you in understanding this market and how you can easily trade stocks...

Key Tips for Trading in a Fluctuating Market

Have you ever observed nature? Many things, such as the trajectory of a bee, may seem random. At the same time, they are not - there is nothing random in nature...

Dogecoin Trading with Leverage

Cryptocurrency CFD trading, particularly with leverage, has garnered significant attention in recent years, and Dogecoin is no exception. When you trade DOG/USD with a reputable forex broker...

Thriving in Day Trading: A Comprehensive Guide to Mastery and Risk Management

Day trading, an increasingly popular venture in the digital era, offers attractive prospects for generating substantial income online. With trading platforms amassing millions of users...

The Guide to cryptocurrencies

Several years ago, say eight or nine, it would have been easy to write a short cryptocurrency list, because following Bitcoin's release in 2009, digital currencies...

Understanding Forex Hedging: A Comprehensive Guide

Forex hedging is a risk management strategy that aims to reduce or eliminate the potential risks associated with financial transactions. It has evolved into a profitable trading strategy for some traders...

What is an Index Fund? A Definitive Guide

When faced with volatility in the financial markets, your first defence against the inevitable is having a well-balanced and diversified portfolio. Diversification of your portfolio can be done in many ways...

How did investors survive the crises of past decades?

The world indexes have never fallen so quickly and strongly before. The financial crisis that has begun is unique for its trigger - it was caused by a virus COVID-19...

Interest rates: why do they matter so much?

There is nothing new about it. You’ve heard about it. We’ve heard about it. The Federal Reserve, the European Central Bank, the Bank of England, the Bank...

IronFX information and reviews
IronFX
77%
AMarkets information and reviews
AMarkets
76%
Just2Trade information and reviews
Just2Trade
76%
T4Trade information and reviews
T4Trade
75%
Riverquode information and reviews
Riverquode
75%
FXCess information and reviews
FXCess
75%

© 2006-2026 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.