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# Relative Strength Index (RSI)

Welles Wilder’s acclaimed price following indicator for all time frames.

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When Wilder introduced the Relative Strength Index, he recommended using a 14-day RSI.. Since then, the 9-day and 25-day Relative Strength Index indicators have also gained popularity.

A popular method of analyzing the RSI is to look for a divergence in which the security is making a new high, but the RSI is failing to surpass its previous high. This divergence is an indication of an impending reversal. When the Relative Strength Index then turns down and falls below its most recent trough, it is said to have completed a “failure swing”. The failure swing is considered a confirmation of the impending reversal.

Ways to use Relative Strength Index for chart analysis:

• Tops and bottoms
The Relative Strength Index usually tops above 70 and bottoms below 30. It usually forms these tops and bottoms before the underlying price chart;
• Chart Formations
The RSI often forms chart patterns such as head and shoulders or triangles that may or may not be visible on the price chart;
• Failure swing (Support or Resistance penetrations or breakouts)
This is where the Relative Strength Index surpasses a previous high (peak) or falls below a recent low (trough);
• Support and Resistance levels
The Relative Strength Index shows, sometimes more clearly than price themselves, levels of support and resistance.
• Divergences
As discussed above, divergences occur when the price makes a new high (or low) that is not confirmed by a new high (or low) in the Relative Strength Index. Prices usually correct and move in the direction of the RSI.

Calculation

RSI = 100-(100/(1+U/D))

where:

• U — is the average number of positive price changes;
• D — is the average number of negative price changes.

[post-title] is a Metatrader 4 (MT4) indicator and the essence of the forex indicator is to transform the accumulated history data.

[post-title] provides for an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.

Based on this information, traders can assume further price movement and adjust their strategy accordingly.

How to install [post-title].mq4?

• Copy [post-title].mq4 to your Metatrader Directory / experts / indicators /
• Select Chart and Timeframe where you want to test your indicator
• Right click on [post-title].mq4
• Attach to a chart
• Modify settings or press ok
• Indicator [post-title].mq4 is available on your Chart

• Select the Chart where is the Indicator running in your Metatrader Client
• Right click into the Chart
• “Indicators list”
• Select the Indicator and delete

[post-title] is a Metatrader 4 (MT4) indicator and the essence of the forex indicator is to transform the accumulated history data.

[post-title] provides for an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.

Based on this information, traders can assume further price movement and adjust their strategy accordingly.

How to install [post-title].mq4?

• Copy [post-title].mq4 to your Metatrader Directory / experts / indicators /
• Select Chart and Timeframe where you want to test your indicator
• Right click on [post-title].mq4
• Attach to a chart
• Modify settings or press ok
• Indicator [post-title].mq4 is available on your Chart
•

• Select the Chart where is the Indicator running in your Metatrader Client
• Right click into the Chart
• “Indicators list”
• Select the Indicator and delete

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