Relative Strength Index

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The Relative Strength Index or RSI is calculated with the following formula, where RS = Average Gain / Average Loss. 14 periods is generally used to calculate RSI^[1] but other periods may used, as long as the period is consistent throughout the calculation. The concept of Relative Strength Index is credited to J. Welles Wilder^[2].

Average Gain = (SUM of the Total Gains for the preceding 14 periods)/ 14

Average Loss (|SUM of the Total Losses for the preceding 14 periods |) / 14

RS=Average Gain / Average Loss

RSI = 100 - ( 100 / 1 + RS ) ^[2]

References

1. ↑ Relative Strength Index. Stockcharts.com. Retrieved on November 25, 2009.
2. ↑ ^{2.0 2.1} Relative Strength Index. Trade2Win.com. Retrieved on November 25, 2009.