RSI index

RSI indicator belongs to the oscillator group and the best time to use it is during a flat period on the market. Full name of RSI indicator means Relative Strength Index. Any market tendency, be that an upward or a downward one, will sooner or later change and switch to the opposite direction. RSI is an oscillator that calculates the ratio of oversold and overbought conditions. This index calculates the ratio for certain time periods and shows their coefficient. The value of the indicator can range from 0 to 100. If RSI value is below 30, it indicates the oversold condition of the market, if the value exceeds 70 - the overbought one. Lastly, when using RSI it should be remembered that this index is the most helpful at the sideways movement of the market, and that it may provide many false signals in case of a clearly defined trend. Therefore, this index is hardly used by itself, it is combined with additional indexes.

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