The Relative Strength Index (RSI) was developed by J. Welles W | LiteFinance

The Relative Strength Index (RSI) was developed by J. Welles Wilder, the author of another standard indicator for МТ4 and МТ5, the ATR indicator.
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What does relative strength index mean?
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According to the RSI definition, it is a momentum oscillator that measures the velocity and magnitude of price movements. It is a dynamic line moving in the scale from 0 to 100. The indicator compares the closing prices of the current and the previous candlesticks, indicating the trend strength.
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How to read the RSI indicator?
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The relative strength index charts work as follows:
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The stronger is the relative price movement up, the greater is the total value of rising candlesticks, and the stronger is the uptrend. The oscillator line is close to value 100.
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The stronger is the relative price movement down, the greater is the total value of descending candlesticks. So, the stronger is the downtrend, the closer the oscillator line to 0.
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The oscillator is displayed in a separate window under the trading chart.
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Horizontal dotted lines are signal lines, whose parameters are specified in the settings. The values of 30 and 70 are by default; the levels scale is on the right of the chart.
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The overbought zone is between levels 70 and 100.
The oversold zone is between the levels of 30 and 0.
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These zones are strong as the trend and the oscillator are the most likely to reverse.
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If the trend is clear, the levels of the borders of the range can be moved to 20 and 80. Levels 30 and 70 are used if the trend is weak, or the market is trading flat. The longer is the distance between the signal levels, the less frequent are signals. On the other hand, the signals are more accurate in this case.
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You can employ the indicator in any market. It is equally efficient in the Forex trading charts, in the securities or stock markets.

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