Relative Strength Index (RSI) Calculator
Calculate the Relative Strength Index (RSI) for stocks, crypto, and forex technical analysis. Free RSI calculator identifies overbought and oversold conditions with charts.
About This Calculator
The Relative Strength Index (RSI) Calculator is a powerful technical analysis tool used by traders and investors to measure the momentum of price movements in stocks, cryptocurrencies, forex, commodities, and other financial assets. Developed by J. Welles Wilder in 1978, the RSI is one of the most popular and reliable momentum oscillators in financial markets. This free calculator helps you identify overbought and oversold conditions, spot potential trend reversals, and make more informed trading decisions.
The RSI is calculated using the formula RSI = 100 − 100 / (1 + RS), where RS (Relative Strength) equals the average gain divided by the average loss over a specified lookback period (typically 14). Wilder's smoothing method is used: the first average gain and loss are simple averages, and subsequent values are smoothed using the formula: New Average = (Previous Average × (Period − 1) + Current Change) / Period. The RSI ranges from 0 to 100, with values above 70 suggesting overbought conditions and values below 30 suggesting oversold conditions. The 50 level serves as a neutral equilibrium point where gains and losses are balanced.
The RSI is versatile across all global markets. In US markets, traders commonly use RSI with 14-period settings on daily charts for swing trading and 7-9 periods for short-term momentum trading. In Indian markets, RSI is widely applied to Nifty 50 and Bank Nifty stocks with 14-period default settings, while intraday traders often adjust to 7-9 periods with 80/20 thresholds. UK traders apply RSI similarly to FTSE 100 stocks, combining it with moving averages for confirmation. The indicator works across all asset classes including equities, crypto (Bitcoin, Ethereum), forex pairs (EUR/USD, GBP/USD), and commodities (gold, silver, crude oil). For cryptocurrency trading, which is known for high volatility and strong momentum, RSI with 14-21 periods provides more reliable signals when combined with volume indicators.
Frequently Asked Questions
What is the Relative Strength Index (RSI)?
The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and magnitude of recent price changes. It ranges from 0 to 100 and helps traders identify overbought (above 70) and oversold (below 30) conditions in stocks, cryptocurrencies, forex, and other financial instruments.
How is RSI calculated?
RSI is calculated using the formula RSI = 100 - 100/(1 + RS), where RS (Relative Strength) = Average Gain / Average Loss over a specified period (typically 14 days). Average gains and losses are calculated using Wilder's smoothing method, where the first average is a simple average and subsequent values use a smoothing factor.
What does an RSI above 70 mean?
An RSI value above 70 indicates the asset is overbought, meaning the price has risen significantly and may be due for a pullback or reversal. Traders often consider this a sell signal, especially when combined with bearish divergence or other technical indicators.
What does an RSI below 30 mean?
An RSI value below 30 indicates the asset is oversold, meaning the price has fallen sharply and may be due for a bounce or reversal. Traders often view this as a potential buy signal, particularly when confirmed by bullish divergence or support levels.
What period should I use for RSI calculation?
The standard period for RSI is 14, as originally developed by J. Welles Wilder. Shorter periods (7-9) make the RSI more sensitive and generate more signals, while longer periods (20-25) reduce sensitivity and produce fewer but potentially more reliable signals. Day traders often use 7-9 periods, while swing traders prefer 14.
Is RSI reliable for cryptocurrency trading?
Yes, RSI works well for cryptocurrency trading as crypto markets tend to exhibit strong momentum and frequent overbought/oversold conditions. However, crypto markets are highly volatile, so using RSI with longer periods (14-21) and combining it with other indicators like moving averages or volume analysis is recommended for more reliable signals.
What is RSI divergence and why is it important?
RSI divergence occurs when the price moves in the opposite direction of the RSI. Bullish divergence happens when price makes a lower low but RSI makes a higher low, suggesting upward momentum. Bearish divergence occurs when price makes a higher high but RSI makes a lower high, signaling potential downside. Divergence is one of the most powerful RSI trading signals.
Can RSI be used for intraday trading?
Yes, RSI is effective for intraday trading when applied to shorter timeframes (5-minute, 15-minute, or 1-hour charts). For intraday use, traders often adjust the period to 7-9 for faster signals and use threshold levels of 80/20 instead of 70/30 to account for increased noise in shorter timeframes.