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There is an opinion that the technical indicators which are undoubtedly derives from the price, have no value for the trader. Based on the indicator description it is evident that RSI measures the relative strength of fall or rise of investigated asset. Thus, RSI is the ratio of rising and falling bars, adduced to the relative values, which is smoothed by a moving average over some period N. Price – is one of the available price characteristics (High, Low, Close…). MA – Moving average (can be used both the simple and exponential averaging) Price – characteristical close price of the current bar Price – characteristical price of the previous bar Indicator values are calculated by the following formulas:ĭown=Price - Price when Price > Price As the name suggests, “Relative Strength Index” assesses the relative movement strength of the considered instrument.
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RSI refers to the indicators of the oscillating type, which means that the indicator is calculated on the base of the moving average and its values is changed in some corridor. This indicator got widespread and currently it is almost obligatory part of any analytical platform.
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Wallace Wilder and was originally used on the commodity futures. This indicator has been successfully used by traders and analytics around the world for over 35 years. Today we will review one of the most well-known technical indicators – “Relative strength index”. Relative Strength Index Hey there, Protraders!