> ## Documentation Index
> Fetch the complete documentation index at: https://terminal.incrypto.ru/llms.txt
> Use this file to discover all available pages before exploring further.

# RSI

> Relative Strength Index — momentum oscillator measuring speed of price changes.

# Relative Strength Index (RSI)

The Relative Strength Index is a **momentum oscillator** that measures the speed and magnitude of recent price changes on a scale of 0 to 100. Developed by J. Welles Wilder, RSI identifies overbought and oversold conditions and is one of the most widely used indicators in technical analysis.

## How It Works

RSI is calculated in two steps:

**Step 1 — Relative Strength:**

```
RS = Average Gain over N periods / Average Loss over N periods
```

**Step 2 — Normalize to 0–100:**

```
RSI = 100 - (100 / (1 + RS))
```

The "average gain" and "average loss" use a smoothed (Wilder's) moving average: the first value is a simple average, and subsequent values use:

```
Avg Gain = ((Previous Avg Gain × (N-1)) + Current Gain) / N
Avg Loss = ((Previous Avg Loss × (N-1)) + Current Loss) / N
```

This smoothing means the RSI is influenced by all prior data, not just the most recent N bars — though the influence of older bars decays exponentially.

### Indicator Type

**Subchart** — RSI is rendered in a separate panel below the main price chart with its own 0–100 Y-axis.

## Settings

| Parameter    | Type   | Default   | Description                                                     |
| ------------ | ------ | --------- | --------------------------------------------------------------- |
| `period`     | number | 14        | Lookback period for the RS calculation.                         |
| `overbought` | number | 70        | Upper threshold. RSI above this level is considered overbought. |
| `oversold`   | number | 30        | Lower threshold. RSI below this level is considered oversold.   |
| `color`      | color  | `#a78bfa` | Color of the RSI line.                                          |
| `lineWidth`  | number | 1.5       | Thickness of the RSI line in pixels.                            |

### Display Settings

| Parameter            | Type    | Default | Description                                                                               |
| -------------------- | ------- | ------- | ----------------------------------------------------------------------------------------- |
| `displayMode`        | select  | `line`  | Rendering mode: `line` (continuous), `columns` (histogram bars), `candles` (OHLC bodies). |
| `highlightAnomalies` | boolean | `false` | Highlight bars where RSI value is statistically anomalous.                                |
| `anomalyThreshold`   | number  | 2.0     | Standard deviations above mean for anomaly detection.                                     |
| `anomalyPeriod`      | number  | 50      | Lookback window for anomaly mean/stddev calculation.                                      |

### Period Tuning

| Period | Character                    | Best For                                     |
| ------ | ---------------------------- | -------------------------------------------- |
| 7      | Very fast, noisy             | Scalping, 1m–5m charts                       |
| 9      | Fast                         | Intraday trading, 5m–15m charts              |
| 14     | Standard (Wilder's original) | General purpose, all timeframes              |
| 21     | Slow, smooth                 | Swing trading, daily charts                  |
| 25+    | Very slow                    | Position trading, filtering major moves only |

<Tip>
  The standard 14-period RSI works well in most situations. Shortening the period makes RSI reach overbought/oversold more frequently (more signals, more noise). Lengthening it makes RSI smoother but slower to react.
</Tip>

## Interpretation

### Overbought and Oversold

The classic interpretation:

* **RSI above 70**: Overbought — the asset has been rising aggressively and may be due for a pullback.
* **RSI below 30**: Oversold — the asset has been falling aggressively and may be due for a bounce.

However, these are **not** automatic reversal signals. In strong trends, RSI routinely stays in overbought or oversold territory for extended periods.

### Adjusted Levels for Trending Markets

In a strong uptrend, RSI rarely drops below 30. The effective range shifts upward:

| Market State     | Overbought Zone | Oversold Zone |
| ---------------- | --------------- | ------------- |
| Strong uptrend   | 80+             | 40            |
| Neutral/ranging  | 70              | 30            |
| Strong downtrend | 60              | 20            |

Some traders adjust the `overbought` and `oversold` settings to match the prevailing trend. For example, in a confirmed bull market on the daily chart, setting overbought to 80 and oversold to 40 produces more useful signals.

### Centerline Crossovers

* **RSI crossing above 50**: Momentum shifting bullish. Average gains exceeding average losses.
* **RSI crossing below 50**: Momentum shifting bearish. Average losses exceeding average gains.

The 50 level acts as a trend filter: sustained RSI above 50 = bullish regime, sustained below 50 = bearish regime.

### Failure Swings

A failure swing is a specific RSI pattern that Wilder himself considered the strongest RSI signal:

**Bullish failure swing:**

1. RSI drops below 30 (oversold).
2. RSI bounces above 30.
3. RSI pulls back but **stays above 30** (does not make a new low).
4. RSI breaks above the bounce high → buy signal.

**Bearish failure swing:**

1. RSI rises above 70 (overbought).
2. RSI drops below 70.
3. RSI rallies but **stays below 70** (does not make a new high).
4. RSI breaks below the pullback low → sell signal.

### RSI Trend Lines

You can draw trend lines on the RSI subchart itself:

* A broken RSI uptrend line often precedes a price breakdown.
* A broken RSI downtrend line often precedes a price breakout.
* RSI trend line breaks typically lead price trend line breaks by 1–3 bars.

## Alerts

RSI supports the following **alert rules**:

| Alert Event  | Description                                |
| ------------ | ------------------------------------------ |
| `overbought` | RSI crosses above the overbought threshold |
| `oversold`   | RSI crosses below the oversold threshold   |

<Tip>
  In strong trends, RSI can stay overbought or oversold for extended periods — an overbought reading alone is not a sell signal. Look for RSI divergences, failure swings, or combine with price action at key levels for higher-probability setups.
</Tip>

## Combining with Other Indicators

| Companion           | Strategy                                                                 |
| ------------------- | ------------------------------------------------------------------------ |
| **Bollinger Bands** | RSI oversold + price at lower Bollinger Band = strong bounce zone        |
| **VWAP**            | RSI oversold + price below VWAP returning to VWAP = mean reversion entry |
| **Volume Bars**     | RSI overbought + declining volume = weakening rally, potential reversal  |
| **MACD**            | RSI divergence + MACD histogram declining = double momentum confirmation |
| **Session Levels**  | RSI oversold at previous day low = high-probability support bounce       |

## Common Pitfalls

1. **Mechanical overbought = sell, oversold = buy** — This works in ranges but fails badly in trends. Always determine market context first.
2. **Ignoring the 50 line** — The centerline is more useful as a trend filter than the 70/30 levels in many situations.
3. **Too-short period on high timeframes** — RSI(7) on a daily chart produces many false signals. Use 14 or higher for daily+ charts.
4. **Not confirming with price action** — RSI should confirm what price structure suggests, not override it. An oversold RSI does not help if price structure is clearly bearish (lower lows, lower highs, breaking support).

## Practical Considerations

* **Startup period**: RSI requires approximately `10 × period` bars to fully stabilize due to Wilder's smoothing method. The first few RSI values on a freshly loaded chart may differ slightly from stabilized values.
* **All timeframes**: RSI works on any timeframe from 1-minute to monthly. Lower timeframes produce more noise; higher timeframes produce smoother, more reliable signals.
* **Crypto-specific**: Crypto markets trend harder than equities. In a crypto bull run, RSI(14) on the daily chart can stay above 70 for weeks. Consider the adjusted levels table above.

## Related Indicators

* [RSI Divergence](/en/indicators/classic/rsi-divergence) — Automatically detects price-RSI divergences
* [MACD](/en/indicators/classic/macd) — Complementary momentum indicator based on moving average convergence
* [Bollinger Bands](/en/indicators/classic/bollinger-bands) — Volatility bands for overbought/oversold confluence