Trading Expert Knowledge

Reference Knowledge

1. Technical Analysis Indicators Reference

RSI (Relative Strength Index)

Formula: RSI = 100 - (100 / (1 + RS))
Where:  RS = Average Gain / Average Loss over N periods (default N = 14)

Step-by-step calculation:
  1. For each period, compute change = Close(t) - Close(t-1)
  2. Gains = max(change, 0), Losses = abs(min(change, 0))
  3. First average: simple mean of first 14 gains/losses
  4. Subsequent: AvgGain = (PrevAvgGain * 13 + CurrentGain) / 14  (Wilder smoothing)
  5. RS = AvgGain / AvgLoss
  6. RSI = 100 - (100 / (1 + RS))