Computerized Investing > February 17, 2018

Classic Technical Indicators: Advanced Interpretations of the RSI

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by Raymond Rondeau


In the third part of this series on the relative strength index (RSI) indicator, I look deeper into some intermediate-level methodologies and applications utilizing RSI. To begin, I look at some of the indicator’s strengths, weaknesses, cautions and misconceptions in an effort to gain a better overview and feel for the indicator. After the conclusion of that section and the final theory of the indicator, I then break down in detail six specific and direct applications with RSI. Included are discussions on intermediate chart interpretations for direct security analysis and some alternate methodologies of using RSI to potentially benefit investors.

For all articles in this series, please click here.

Accepted Indicator Strengths

RSI can be a very simple indicator to interpret and it does generate a number of well-defined, easily identifiable signals. Because of this, it is very popular and utilized by investors of all levels or experience. Additionally, it is widely distributed and readily available free of charge on the web or within any technical investing platform.

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Edward Emory from TN posted 4 months ago:

Sometimes voodoo works and sometimes it doesn't. A lot of work for little results.

Paul Hartmann from NY posted 4 months ago:

A great deal more insight to the concept of RSI than you will find most other places. Nice job on the hard work

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