HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
Vantage information and reviews
Vantage
85%
XM information and reviews
XM
82%

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

When is the best time to buy Bitcoin?

Should you buy Bitcoin at $20k or wait for an even bigger drop? There are many arguments in favor of not postponing the purchase of the flagship crypto...

Gold at 8 years highs. Why so and who will benefit from it?

The business of storage operators with a high level of security, in which physical, not virtual, metal is stored, is in a boom of demand from wealthy investors...

How to Trade Bitcoin and Crypto CFDs in 2020?

Bitcoin is a popular cryptocurrency that is accepted as digital money, traded as financial security and used for online transactions around the globe...

Automating Your Forex Trading

As the forex market moves enthusiastically into the electronic age...

How to Construct a Mechanical Forex Trading System

As forex software becomes more complex and automation becomes more common, many traders now rely on mechanical forex trading systems...

InvestLite: Bitcoin investment explained

Bitcoin is digital money that does not physically exist. However, there are special registers where information is stored about how many bitcoins someone...

Dealing With Volatility: What Is VIX Index?

Volatility is a great factor when it comes to trading and the market. Hence, market indicators were developed to help traders quantify the volatility expectations of the market...

Netflix Stock: Should You Invest in Netflix in 2022?

We can argue about whether investing in Netflix (NFLX) stock is a good or bad option, but there is no denying that the American entertainment company has changed the rules of the game...

Oscillating Indicators - Slow Stochastic

The slow stochastic is an oscillating indicator. Developed by George Lane , it can alert you to a shift of investor sentiment from bullish to bearish or vice versa...

Why trade futures?

In this article, we’ll be taking a deep dive into the future. We’ll touch on the types of assets that can be traded using futures, and the advantages and general why trade futures from the global traders...

HF Markets Enhances Its HFcopy Trading Platform for Enhanced Trading Synergy

HF Markets has announced significant upgrades to its HFcopy program, catering to both Strategy Providers (SPs) and Followers, thereby solidifying its position as a premier copy trading platform...

The Effective Use of Technical Indicators

Technical traders often compute and plot mathematical quantities based on market observables like price and volume in order to indicate the past or present state of the market...

The Complexities and Nuances of Touch Trading: A Comprehensive Analysis

Touch trading, a strategy employed in the volatile world of forex trading, is a sophisticated approach that requires traders to enter the market at a precise intersection of live price impact with a predetermined price level...

Is Shiba Inu (SHIB) a Good Investment?

Over the last few years, the Shiba Inu cryptocurrency has exploded in popularity. The coin initially started as a "meme coin" but has found significant loyalty from its community...

Top Tech Trends of the Future for Trading

Tech development impacts our daily lives as well as traders’ profits. Technologies change rapidly, creating new opportunities in everyday routine and the stock market...

Short selling as a way to profit

Short selling is a method of stock trading that allows investors to profit from an investment vehicle that is going down in value and that they do not own...

Risk Management in Cryptocurrency Trading

The cryptocurrency market is still quite new and unusual for most forex traders. Non-standard, as compared to traditional...

Crypto trading: what are cryptocurrencies?

Cryptocurrencies are digital money, which represents a class of assets that do not exist in physical form but are created virtually through computer technology...

Understanding What Crypto Trading is All About

The idea of Bitcoin and other cryptocurrencies feels like it has only just been created, but the first instance we see of these digital assets came out around 11 years ago...

Understanding Buy and Sell Walls in Crypto Trading

The world of cryptocurrency trading is a dynamic and ever-evolving landscape. As investors and traders navigate this digital frontier, they encounter both promising opportunities and formidable obstacles...

FP Markets information and reviews
FP Markets
81%
RoboForex information and reviews
RoboForex
77%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Exness information and reviews
Exness
76%
Just2Trade information and reviews
Just2Trade
76%

© 2006-2025 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.