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RSI and Wilder momentum
புதுப்பிப்பு 4 ஆகஸ்ட் 2026 · 3 நிமிட வாசிப்பு · 14 உள்ளடக்கம்
எளிய மொழி விளக்கம்
Relative Strength Index is a bounded momentum oscillator derived from average gains and losses. XMarketRadar uses Wilder's recursive smoothing, which differs from a rolling simple-average implementation sometimes called Cutler RSI.
Learning objectives #
You should be able to outline the RSI calculation, interpret 0–100 values without automatic action labels, recognise divergence as a separate rule and explain why RSI can remain elevated during a persistent advance.
Core concept #
For period N, separate close-to-close changes into gains and losses, seed each average with the first N changes, then update with Wilder smoothing. RS is average gain divided by average loss and RSI=100−100/(1+RS). No average loss produces 100 under the bounded convention; insufficient history remains unavailable.
Method and conventions #
Use thresholds such as 70 and 30 only as disclosed descriptive bands. Define whether a rule requires crossing a threshold or merely remaining beyond it. For divergence, define pivot selection and comparison window before looking at outcomes.
Use it in XMarketRadar #
Add RSI in charting, verify period and interval, and inspect the completed bar. In Screener, combine RSI with an explicit universe and other independent evidence while ensuring missing RSI excludes rather than passes a row.
Worked example #
Suppose the Wilder-smoothed average gain is 1.2 and average loss 0.4. RS=3 and RSI=75. That locates recent gains above losses under the chosen history. It does not mean price must fall or that the instrument is fundamentally expensive.
How to interpret it #
Higher RSI means gains dominate losses more strongly in that smoothed sample. Values above 70 or below 30 are common reference bands, not universal reversal points. A threshold cross is a new event; remaining above the threshold is a continuing state.
Limitations and common mistakes #
Do not mix Wilder and simple smoothing, calculate from fewer than N+1 closes, infer divergence by eye without pivot rules, or optimise thresholds per instrument after seeing returns. RSI from daily and intraday bars answers different questions.
Market-specific differences #
Session volatility and price limits affect RSI behaviour across markets. Comparisons should use the same interval, period, completed session and price basis; a threshold need not have equal historical frequency everywhere.
Key takeaway #
Key takeaway: RSI is a precisely smoothed ratio of recent gains and losses. Thresholds describe location in that ratio, not inevitable reversal.
Practice exercise #
Practice: hand-calculate a short RSI seed, identify one threshold crossing and one continuing state, then compare the same series under a rolling-simple-average method.
Educational use only #
This chapter is descriptive education. It is not investment advice, a price prediction, a recommendation, a claim of predictive accuracy, or an instruction to buy, sell, rebalance or place an order.