Rsi Calculator

Relative Strength Index (RSI) Calculator

Use this calculator to determine the Relative Strength Index (RSI) for a given set of average gains and losses over a specified period. The RSI is a momentum oscillator that measures the speed and change of price movements, helping traders identify overbought or oversold conditions.

function calculateRSI() { var avgGainInput = document.getElementById("avgGain").value; var avgLossInput = document.getElementById("avgLoss").value; var avgGain = parseFloat(avgGainInput); var avgLoss = parseFloat(avgLossInput); var rsiResultDiv = document.getElementById("rsiResult"); rsiResultDiv.innerHTML = ""; // Clear previous results if (isNaN(avgGain) || isNaN(avgLoss) || avgGain < 0 || avgLoss < 0) { rsiResultDiv.innerHTML = "Please enter valid positive numbers for Average Gain and Average Loss."; return; } var rs; var rsi; if (avgLoss === 0) { if (avgGain === 0) { // No price movement, typically RSI is 50 rs = "N/A (no movement)"; rsi = 50; } else { // All gains, no losses rs = "Infinite"; rsi = 100; } } else { rs = avgGain / avgLoss; rsi = 100 – (100 / (1 + rs)); } rsiResultDiv.innerHTML = "

RSI Calculation Results:

" + "Average Gain: " + avgGain.toFixed(2) + "" + "Average Loss: " + avgLoss.toFixed(2) + "" + "Relative Strength (RS): " + (typeof rs === 'number' ? rs.toFixed(2) : rs) + "" + "Relative Strength Index (RSI): "; }

Understanding the Relative Strength Index (RSI)

The Relative Strength Index (RSI) is a popular momentum oscillator developed by J. Welles Wilder Jr. It is used in technical analysis to measure the speed and change of price movements. The RSI oscillates between zero and 100 and is typically used to identify overbought or oversold conditions in a market or asset.

How RSI is Calculated (Simplified)

The core of the RSI calculation involves two main components: Average Gain and Average Loss over a specified period (commonly 14 periods).

1. Average Gain: This is the average of all positive price changes (upward movements) over the chosen period.
2. Average Loss: This is the average of all negative price changes (downward movements), taken as a positive value, over the chosen period.

Once these averages are determined, the Relative Strength (RS) is calculated:

RS = Average Gain / Average Loss

Finally, the RSI is derived from the RS using the following formula:

RSI = 100 - [100 / (1 + RS)]

Our calculator simplifies this by allowing you to input the pre-calculated Average Gain and Average Loss, directly providing you with the resulting RS and RSI values.

Interpreting RSI Values

• Overbought (Typically above 70): When the RSI rises above 70, it suggests that the asset may be overbought and could be due for a price correction or reversal.
• Oversold (Typically below 30): When the RSI falls below 30, it suggests that the asset may be oversold and could be due for a price bounce or reversal.
• Mid-Range (30-70): Values between 30 and 70 generally indicate that the market is trending without extreme overbought or oversold conditions. The 50-level is often seen as a centerline, with values above 50 indicating bullish momentum and values below 50 indicating bearish momentum.

Using the RSI Calculator

To use this calculator:

1. Enter Average Gain: Input the average of the positive price changes over your desired period (e.g., 14 days).
2. Enter Average Loss: Input the average of the negative price changes (as a positive number) over the same period.
3. Click "Calculate RSI": The calculator will instantly display the calculated Relative Strength (RS) and the final Relative Strength Index (RSI).

Examples:

• Example 1: Balanced Movement
  • Average Gain: 10.00
  • Average Loss: 5.00
  • RS: 10.00 / 5.00 = 2.00
  • RSI: 100 - (100 / (1 + 2.00)) = 100 - (100 / 3.00) = 100 - 33.33 = 66.67 (Approaching overbought)
• Example 2: Strong Downward Momentum
  • Average Gain: 5.00
  • Average Loss: 10.00
  • RS: 5.00 / 10.00 = 0.50
  • RSI: 100 - (100 / (1 + 0.50)) = 100 - (100 / 1.50) = 100 - 66.67 = 33.33 (Approaching oversold)
• Example 3: All Gains
  • Average Gain: 15.00
  • Average Loss: 0.00
  • RS: Infinite
  • RSI: 100.00 (Strongly overbought)
• Example 4: All Losses
  • Average Gain: 0.00
  • Average Loss: 12.00
  • RS: 0.00
  • RSI: 0.00 (Strongly oversold)
• Example 5: No Price Change
  • Average Gain: 0.00
  • Average Loss: 0.00
  • RS: N/A (no movement)
  • RSI: 50.00 (Neutral)

Limitations of RSI

While a powerful tool, RSI has limitations:

• False Signals: In strong trends, RSI can remain in overbought or oversold territory for extended periods, leading to premature exit signals.
• Divergence: While divergence (when price makes a new high/low but RSI doesn't) can be a strong signal, it doesn't guarantee a reversal.
• Lagging Indicator: Like most oscillators, RSI is derived from past price data, making it a lagging indicator.

It's always recommended to use RSI in conjunction with other technical analysis tools and indicators for more robust trading decisions.