The default setting for the RSI is 14 days. The RSI was developed by J.Welles Wilder and detailed in his book New Concepts in Technical Trading Systems in June of 1978. With practice, and in combination with a firm understanding of volume and price action, the RSI indicator can simply be a helpful tool in your trading arsenal. Using the indicator can also help predict trends, trend reversals, trend continuations, or stagnate corrections. When used properly, it can help predict rising momentum, underlying demand or supply, and shifts in sentiment. Indicators can certainly help with this if used correctly. Why the RSI?Īs traders, our job is to look for an edge in the market. Generally speaking, it helps to measure periods of overbought or oversold conditions. This number is computed and has a range between 0 and 100.Ī reading above 70 is considered bullish, while a reading below 30 is an indication of bearishness. The Relative Strength Index (RSI) is a basic measure of how well a stock is performing against itself by comparing the strength of the up days versus the down days. #2 – Divergences Do Not Always Lead to Meltdowns.Examples of where the Relative Strength Indicator Fails.Trading Strategies Using the Relative Strength Index Indicator.NEW CONCEPTS IN TECHNICAL TRADING SYSTEMS develops computer trading programs and computer software, and distributes his book. Wilder's company, Trend Research, Ltd., McLeansville, N.C. Wilder has presented his methods and systems at technical trading seminars In Asia, Australia, Canada, the U.S. Wilder's systems and methods than any other single discipline. Around the world, there are probably more traders using Mr. He has authored many articles on trading techniques and makes appearances on radio and television programs. Wilder is an active trader and advisor on technical trading systems and methods. Most computer trading systems in use today utilize some of Wilder's originally published concepts. His "Directional Movement" system and "Parabolic lime/Price" system have become bywords to technical traders world-wide. Wilder out as 'The premier technical trader publishing his work today." FORBES goes on to say, "For those of you who have seen all the conventional systems, this book is the place to start." Wilder's "Relative Strength Index" (RSI) is monitored dally by many big brokerage firms and Is charted by most chart services for each commodity. His revolutionary book, New Concepts in Technical Trading Ststems is legendary, In technical circles. Welles Wilder is known world-wide for his Innovative and original concepts for technical trading systems. NEW CONCEPTS IN TECHNICAL TRADING SYSTEMS.
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