Buy & Sell Pressure And A Faster RSI by Tushar S. Chande, PhD
Most of you are familiar with the relative strength index (RSI), but are you taking full advantage of it? Here, we deconstruct the RSI to lead to a more intuitive and symmetrical gauge of buying and selling pressure and a more responsive indicator.
Many novice and even intermediate traders have told me over the years that they find the ever-popular relative strength index (RSI) indicator confusing. The RSI is an oscillator plotted on a scale of zero to 100, and is typically used as an overbought/oversold indicator, which means that it is used to signal impending reversals in direction. However, during strong trends, the RSI can remain at “extreme” levels, either high or low, for the duration of the trend, and thus, it’s not precise as an indicator of impending reversals ...