Relative Strength Index (RSI)

#What you see

A line in its own pane on a fixed scale from 0 (bottom) to 100 (top). No 70/30 lines are drawn. Green lines in the pane mark bullish divergences, red lines bearish ones; each connects the RSI at two swing points.

#How it is calculated

ChartRider uses Wilder's method on the close, with N = Period:

1. The change of each candle is close − previous close. Gains are the positive changes, losses the negative ones taken as positive numbers.
2. The first average gain and average loss are simple averages over the first N changes.
3. After that, Wilder smoothing: average = (previous average × (N − 1) + current gain or loss) / N.
4. RS = average gain / average loss and RSI = 100 − 100 / (1 + RS). Without losses the RSI is 100, without gains 0.

The first value appears on candle N + 1.

Divergences. A swing low is a candle whose close is at or below the closes of the Period candles before it and of the following candles set by Look Back Range; swing highs work the other way round. The RSI line gets the same test. A bullish divergence is two consecutive swing lows in price where the second is lower, while the RSI has swing lows on the same two candles and the second is higher. A bearish divergence is a higher swing high in price with a lower swing high in the RSI.

#How to read it

• Above 70 is commonly read as overbought, below 30 as oversold. In strong trends the RSI can stay there for a long time.
• Above 50 momentum is on the buyers' side, below 50 on the sellers' side.
• Divergences show fading momentum. A swing is only confirmed after the following candles have closed, so a divergence line appears with that delay.

#Using it in strategies

Output: value (0 to 100); the divergence lines are not an output. In the Trade Setup, "Range" keeps entries within a band (e.g. 40 to 60), "Against" suits mean reversion (center 50 with x −20 allows longs at 30 or lower and shorts at 70 or higher), and "Compare" checks a level. In WickScript use the built-in rsi(source, length), e.g. rsi(close, 14), or use indicator "RSI" with period 14 as r and read r.value.

#Settings

Open the settings with the slider icon next to the indicator (Indicators, F3). Numeric settings can be swept as Step 1 / Step 2 parameters when you run a strategy.

#Inputs

#Styles

#Outputs

These values can be used in Trade Setup triggers, filters and exits (see Trade Setup) and in WickScript.

#Use in WickScript

use indicator creates this indicator inside a script, with settings by their ID. Each output is a field of the name after as. See WickScript indicators.

wickscript 1
indicator "Relative Strength Index (RSI) from the list" in pane
use indicator "RSI" with period 14 as myRsi
show myRsi.value as line "value"