RSI stands for Relative Strength Index, which is a technical analysis indicator that measures the magnitude of gains against the magnitude of losses over a certain time period. The equation used is RSI = 100 - 100 / (1 + RS) where RS = (total gains / n) / (total losses / n) and n = number of periods. The value can range from 1 to 100, with a value under 30 indicating bullishness and a value over 70 indicating bearishness..
The Relative Strength Index (RSI) is used to identify when a market is overbought or oversold. It is computed by analysing all the bullish ranges against all the bearish ranges during a particular period of time (usually 14 days). By adding all the bullish trades (when prices went up) and dividing it by the summation of the bearish days (when prices went down) we then turn it into an index from 0 to 100. A general rule is that when the RSI crosses the 30 line from below, it signifies a bullish signal and when it crosses the 70 line from above, it signifies a bearish signal..
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