📊 RSI Calculator

The Relative Strength Index measures momentum on a 0 to 100 scale. With average gains of 1.25 and average losses of 0.75 over 14 periods, RS is 1.667 and RSI is 62.50: firmly neutral, leaning strong. Above 70 is overbought, below 30 is oversold. This calculator turns your gain/loss averages into the oscillator reading and the signal.

RSI does not predict direction; it measures the speed and size of recent moves. A high RSI means gains have dominated lately, which often precedes a pause, not a collapse. Treat it as a thermometer, not a crystal ball.

How to Use This Calculator

Enter the average gain and average loss over the last 14 periods, using Wilder’s smoothing as most charting platforms do. Use the same period length for both, and daily data unless you have a reason otherwise.

The RSI Formula

Wilder’s original method seeds the averages with a simple 14-period mean, then smooths: each new average = (prior average x 13 + current gain or loss) / 14. That smoothing is why RSI reacts quickly at first and then settles. When average loss is zero, RSI is 100 by definition: every period was up.

The 14-period default is convention, not law. Shorter periods (7-9) make RSI twitchier for scalping; longer ones (21-25) smooth it for position trading. Changing the period changes every threshold’s meaning, so backtest before trusting a custom setting.

Worked Example

Average gain 1.25, average loss 0.75. RS = 1.25 / 0.75 = 1.667. RSI = 100 - (100 / 2.667) = 100 - 37.50 = 62.50. Neutral zone, 7.5 points from overbought. Momentum favors buyers but is not stretched.

Overbought version: average gain 2.10, average loss 0.40. RS = 5.25, RSI = 100 - (100/6.25) = 84.00. Deep overbought. In a strong uptrend this can persist for weeks while price keeps climbing, which is why professionals sell overbought RSI into resistance rather than shorting it blindly. Divergence, price making new highs while RSI does not, is the higher-quality signal.

Reading RSI Like a Technician

The midline is underused: in uptrends RSI tends to hold 40-90, in downtrends 10-60. Regime awareness beats level-chasing. And RSI works on any timeframe and any market, stocks, crypto, forex, because it measures only the shape of recent price action. For position sizing around any signal, pair it with disciplined risk math, and remember this page is educational, not financial advice.

Common RSI Mistakes

Three errors repeat forever. First, shorting overbought in a raging trend: RSI can sit above 70 for a month while price doubles. Second, using default 70/30 on volatile assets like crypto, where 80/20 fits better. Third, trading RSI alone without price context: an oversold bounce into overhead resistance is a scalp, not a trend change. RSI is one input to a decision, never the decision. Combine it with trend, volume, and levels, and size every trade so a wrong read costs a planned amount, not a painful one.

Multi-Timeframe RSI: The Stack

RSI on one timeframe is noise-prone; stacked timeframes filter it. The method: monthly RSI sets the regime (above 50 favors longs), weekly RSI times the setup (pullback toward 40 in an uptrend), daily RSI triggers the entry (cross back above 30 or bullish divergence). Each timeframe votes, and trades need a majority. A daily oversold signal against a monthly downtrend is a countertrend scalp at best.

This works because different participants watch different clocks: institutions steer the monthly, swing traders the weekly, day traders the daily. Alignment means the big money and the fast money agree, which is when moves sustain. Keep a simple dashboard: three RSIs, three regimes, one rule about only trading with the higher timeframes. Complexity beyond that adds little; discipline adds everything.

RSI Failure Swings

Wilder’s failure swing is RSI’s purest reversal pattern. A bullish failure swing: RSI falls below 30, bounces above 30, pulls back but holds above 30, then breaks its prior peak. Four steps, no price confirmation needed in the classic telling, though modern traders demand it. The pattern captures momentum turning before price confirms, which is both its edge and its risk.

Failure swings work best at major support and resistance, where order flow concentrates. In the middle of a range they whipsaw. The practical filter: only trade swings that align with the higher timeframe trend or strike obvious levels. Like all RSI patterns, the failure swing is a setup, not a system: it needs position sizing and invalidation like everything else. Patterns propose; risk management disposes.

RSI and Position Sizing

A signal without sizing is entertainment. Size RSI-based trades so the invalidation, say a close back through the signal level, costs a fixed fraction of capital, typically 1 percent or less. The expectancy math: win rate times average win must exceed loss rate times average loss, and RSI signals’ edge is modest enough that sizing discipline decides profitability more than signal quality.

Keep a journal: signal type, entry, invalidation, outcome. After fifty trades the data shows which RSI setups actually pay in your hands, which is more valuable than any textbook statistic. Most traders discover their best setup is narrower than they thought and their sizing was looser than it should have been. The journal teaches what the market charges tuition to learn.

Estimates for planning only, not financial advice.