RSI (Relative Strength Index)

Indicator Description

RSI (Relative Strength Index) is a momentum indicator that measures the strength of price momentum by comparing the magnitude of price gains and losses. It is one of the most commonly used technical indicators.

Function Information

  • Function Name: RSI
  • Input Parameters:
    • Close: Closing price
  • Parameter Settings:
    • timeperiod: Calculation period, default 14
  • Output: RSI value

Calculation Principle

RSI is calculated using the following formula:

RS = Average Gain / Average Loss
RSI = 100 - (100 / (1 + RS))

Where:

  • Average Gain is the average of price gains
  • Average Loss is the average of price losses

Usage Scenarios

  1. Overbought/Oversold Analysis
  2. Trend Confirmation
  3. Trading Signal Generation
  4. Divergence Analysis

Usage Recommendations

  1. RSI > 70 indicates overbought conditions
  2. RSI < 30 indicates oversold conditions
  3. Watch for 50-line crossovers
  4. Pay attention to divergence patterns
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