Periods in the RSI calculation

Periods in the RSI calculation

In the article in June 1978 Welles Wilder introduced the Relative Strength Index (RSI), which is distributed oscillator.
Mr. Wilder book, "New concepts in technical trading systems, also provide step-by-step instructions for the enumeration and explanation of RSI calculation.
The name "Relative Strength Index" is somewhat dangerous because there is no comparison of the relative strength of two securities in the RSI calculation, but Homeland Security is the only stability.
"Internal Strength Index" may be more appropriate name. Two market indexes, which are often known as Comparative Relative Strength are compared with the relative strength scale.
Relative Strength Index

When the RSI calculation was introduced, Wilder recommends using 14-day RSI, but the 9-day and 25-day RSIs have also been popular. Also it is a chance to find a period that will be appropriate for you during the experiments by changing the number of periods in the RSI calculation. (Volatility indicator depends on the number of days used for calculating the RSI - the indicator will be more unstable if it was used less days.)

The RSI organized between 0 and 100 and it is also named as a cost-per oscillator. The best analysis of the RSI calculation was found out: it is better to find a divergence in which a new high is made by security, but RSI calculation is going down to surpass its previous peak. This divergence means that the turnaround would come soon. A "failure swing" ended when the RSI turns down and fall below its most recent low.

The fact that failure occurred proves swing coming reversal. Mr. Wilder described in the book uses the five RSI in analyzing commodity charts. You can also use this method as well as other types of insurance.