RSI - Relative Strength Index — Smart Financial Analysis
Calculate RSI from average gain and average loss. Overbought (RSI > 70), oversold (RSI < 30). Standard 14-period setting.
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The Relative Strength Index is a momentum oscillator (0-100) developed by J. RSI = 100 - 100/(1+RS). Overbought (RSI > 70) suggests the asset may be overvalued and due for a pullback. Bullish divergence: price makes lower low, RSI makes higher low (potential reversal up).
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Why: The Relative Strength Index is a momentum oscillator (0-100) developed by J. Welles Wilder in 1978. It measures the speed and magnitude of price changes. RSI above 70 = overboug...
How: Enter Average Gain, Average Loss, Period (N) to get instant results. Try the preset examples to see how different scenarios affect the outcome, then adjust to match your situation.
Run the calculator when you are ready.
📋 Quick Examples — Click to Load
📊 RSI Gauge — Current Value
RSI with overbought (70+) and oversold (30-) zones
🍩 Gain vs Loss Proportion
Average gain vs average loss (RS components)
📊 RSI by Period
RSI at different period settings (7, 9, 14, 21, 25)
📈 RSI Sensitivity to Gain
RSI at different average gain levels (fixed loss)
RSI
neutral | RS: 1.20 | Price: +2.04%
For educational purposes only — not financial advice. Consult a qualified advisor before making decisions.
💡 Money Facts
RSI - Relative Strength Index analysis is used by millions of people worldwide to make better financial decisions.
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Globally, only 33% of adults are financially literate, making tools like this essential.
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The Relative Strength Index (RSI) is one of the most widely used technical indicators, created by J. Welles Wilder Jr. in his 1978 book 'New Concepts in Technical Trading Systems.' Used by millions of traders worldwide across stocks, forex, crypto, and commodities, RSI measures momentum on a 0-100 scale. The classic 70/30 overbought/oversold levels have guided trading decisions for over four decades.
Sources: J. Welles Wilder (Technical Trading Systems), CMT Association, StockCharts, Investopedia.
Key Takeaways
- • RSI = 100 - 100/(1+RS) where RS = Average Gain / Average Loss
- • RSI > 70 = overbought (potential pullback); RSI < 30 = oversold (potential bounce)
- • Standard period is 14; shorter periods = more signals, more noise
- • RSI divergence (price vs RSI moving opposite) is a strong reversal signal
Did You Know?
How Does RSI Work?
The Formula
RSI = 100 - 100/(1+RS). RS = Average Gain / Average Loss over N periods. When average loss is zero, RSI = 100. When average gain is zero, RSI = 0.
Overbought & Oversold
RSI > 70 suggests buying pressure may be exhausted (overbought). RSI < 30 suggests selling pressure may be exhausted (oversold). These are signals, not guarantees.
Period Selection
14 periods is standard. Shorter periods (7-9) give more signals but more false positives. Longer periods (21-25) are smoother and more reliable for swing trading.
Expert Tips
RSI by Period Setting
| Period | Use Case | Sensitivity |
|---|---|---|
| 2 | Day trading, mean-reversion | Very High |
| 7-9 | Short-term swing | High |
| 14 | Standard (Wilder) | Medium |
| 21-25 | Long-term position | Low |
Frequently Asked Questions
What is RSI?
The Relative Strength Index is a momentum oscillator (0-100) developed by J. Welles Wilder in 1978. It measures the speed and magnitude of price changes. RSI above 70 = overbought, below 30 = oversold.
How is RSI calculated?
RSI = 100 - 100/(1+RS). RS = Average Gain / Average Loss over N periods (typically 14). First calculation uses simple averages; subsequent use smoothed averages (Wilder's smoothing).
What does overbought/oversold mean?
Overbought (RSI > 70) suggests the asset may be overvalued and due for a pullback. Oversold (RSI < 30) suggests undervaluation and potential bounce. These are signals, not guarantees.
What is RSI divergence?
Bullish divergence: price makes lower low, RSI makes higher low (potential reversal up). Bearish divergence: price makes higher high, RSI makes lower high (potential reversal down). One of the strongest RSI signals.
What period should I use?
Standard: 14 periods. Short-term traders: 7-9 (more signals, more noise). Long-term: 21-25 (fewer signals, more reliable). Day traders often use 2-period RSI for mean-reversion strategies.
Can RSI be used for any market?
Yes - stocks, forex, crypto, commodities, indices. RSI works on any timeframe (1-minute to monthly charts). Most effective in ranging markets; less reliable during strong trends.
Key Statistics
Official Data Sources
⚠️ Disclaimer: This calculator is for educational purposes only. RSI and other technical indicators are not guarantees of future price movement. Past performance does not guarantee future results. Not financial advice. Consult a licensed financial professional for investment decisions.
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