From the average gain and average loss over a period, compute the Relative Strength Index (RSI): RS = avg gain ÷ avg loss; RSI = 100 − 100 ÷ (1 + RS), to judge overbought or oversold market conditions.
Input Data
Results
At a glance:RSI scales the relative strength RS (avg gain ÷ avg loss) to 0–100; high values signal overbought, low values oversold.
Formula
rs = avgGain / avgLoss
rsi = 100 − 100 / (1 + rs)
$$RS = \dfrac{\overline{Gain}}{\overline{Loss}}$$$$RSI = 100 - \dfrac{100}{1 + RS}$$How to Use
- Enter the average gain and average loss.
- Review the RS and RSI (above 70 overbought, below 30 oversold).
FAQ
How is the RSI calculated?
RSI is computed in two steps. First, relative strength RS = average gain ÷ average loss over the period (commonly 14). Second, RSI = 100 − 100 ÷ (1 + RS), which compresses RS (0 to infinity) into a 0–100 scale. With gain far above loss (large RS) RSI approaches 100; equal gains and losses (RS = 1) gives 50; loss far above gain gives near 0. If there are no down days (average loss = 0), RSI is defined as 100.
How do I read RSI values — what do 70 and 30 mean?
RSI ranges 0–100. Above 70 is traditionally 'overbought' — strong upward momentum, possible pullback risk; below 30 is 'oversold' — strong downward momentum, possible rebound. 50 is the neutral midline: above 50 momentum is bullish, below bearish. Also watch 'divergence' — e.g. price makes a new high but RSI does not — which may signal fading momentum. Note 70/30 are conventions, not rules; in strong trends RSI can stay extreme for a long time.
Is RSI reliable, and what should I watch out for?
RSI is a popular and useful momentum gauge, but understand its limits. It is a momentum indicator, not a predictor — overbought can keep rising, oversold can keep falling (this 'sticking' is common in strong trends). The period length (14 common; 9 or 21 also used) changes sensitivity — shorter is noisier, longer is smoother. Do not use it alone; combine with trend (moving averages), support/resistance and volume. In a clear trend, buying on RSI pullbacks (e.g. 40–50 in an uptrend) is often safer than fading extremes. This calculator is a single-point computation; live RSI is a rolling curve where trend and divergence matter more than one number.
Why does RSI 'stick' in strong trends — is fade-trading reliable?
In a strong one-sided trend, RSI can stay in the extreme zone for days or weeks without reversing — that is 'sticking'. It shows momentum is overwhelmingly strong, which is evidence of trend strength, not a reversal signal. So mechanically selling on overbought or buying on oversold in a trend often fights the trend and loses. In range-bound markets, fading extremes works better; in trends, wait for RSI to pull back to 40–50 (uptrend) or 50–60 (downtrend) for with-trend entries, watch divergence over absolute level, and combine with moving averages and volume. Treat RSI as a 'momentum thermometer', not a 'reversal alarm'.
How should I combine RSI with moving averages and pivot points?
No single indicator is enough; combine complementary tools covering trend, momentum and price. Moving averages judge trend direction (above = up, below = down). RSI judges momentum and overbought/oversold. Pivot points mark objective support/resistance prices. A common workflow: use the moving average to set direction (trade only with the trend), use RSI to time entries on pullbacks or to flag divergence, then use pivot points for concrete entry, target and stop levels. When all three agree, the signal is stronger; when they conflict, be cautious. Strict stop-loss and position sizing remain the foundation of survival.
References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.