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Relative strenght index indicator

The RSI indicator defines trend strength in probability of trend reversal. It’s calculated in a following way — the sum of price growths for a given period is divided by the some of the price decrees. The indicator puts the result in data on a scale from 0% to 100%. Once the all candlesticks on a given period are green then the indicator value is 100%. If red — it equals 0%.

Period is a candlestick quantity used in a data collecting. It’s set in the indicator settings and equals 14 by default. Overbought and oversold values are also set and equal the 70% and 30% by default prospectively. If the overbought value gets close to 100%, all the oversold values gets closer to 0% then the signals become more precized although the quantity decreases. If the indicator intersects on a high level, it means the oversold case. When prices are increasing too high and fast and soon are expected to decrease. If the indicator intersects on a low border, it means an overbought case, where prices are getting too low too fast and are expected to increase.

In case of our assigned indicator trend is not correspond with the trend on a chart, many traders rely on indicative values. This case is called divergence. Our assign indicator is one of the most popular indicators among traders. It’s comfortable to use both individually and in combination with other indicators.

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