Definition. An oscillator on a 0–100 scale that compares the average size of price gains and losses over a chosen period. Developed by J. Welles Wilder in 1978.
How it works
High values mean gains have dominated recent periods, low values that losses have. The classic thresholds are 70 and 30, although traders use various periods and thresholds.
Example
A high RSI combined with price at an outer VWAP band can indicate a stretched move.
What to watch out for
A high RSI doesn't mean price must fall. In strong trends the indicator can stay in extreme zones for a long time.
You'll find the full explanation with graphics, examples and exercises in the 🖥️ Order flow atlas space, and its use in the live market in the 🔴 Live Room. Both are available to Club members (in Polish).
