What is the Relative Strength Index (RSI)?
The Relative Strength Index (RSI) is a momentum oscillator developed by J. Welles Wilder Jr. that measures the speed and magnitude of recent price changes on a scale from 0 to 100. Traders use RSI to identify overbought conditions (typically above 70), oversold conditions (typically below 30), and shifts in bullish or bearish momentum.
This calculator supports two input modes: a comma-separated closing price series with Wilder smoothing, or direct average gain and average loss values. Pair RSI readings with pivot point levels for support and resistance context, and use the position size calculator to size trades around your risk tolerance.
RSI formula with Wilder smoothing
Wilder smoothing uses an exponential-style rolling average. The first average gain and average loss are simple means over the first N periods. Each subsequent value updates as:
The same formula applies to average loss. When average loss equals zero and average gain is positive, RSI equals 100.
Worked example (14-period RSI)
Using the default 15 closing prices in this calculator with a 14-period setting, Wilder smoothing produces an RSI of approximately 70.46. That reading sits just above the traditional 70 overbought threshold, signaling strong upward momentum that may eventually cool.
How traders interpret RSI levels
- Above 70: Often labeled overbought. Price may continue higher in strong trends, but reversal risk increases.
- Below 30: Often labeled oversold. Downtrends can persist, but bounce potential rises.
- 50 midpoint: Acts as a rough bull/bear dividing line in range-bound markets.
Frequently asked questions
What RSI period should I use?
Can RSI stay above 70 in a strong trend?
What is the difference between price series and average gain/loss modes?
How does RSI relate to other technical tools?
Are my inputs stored on a server?
Resources and references
The formulas and methods in this calculator were checked against these independent sources.