> ## Documentation Index
> Fetch the complete documentation index at: https://learn.algopilot.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Relative Strength Index (RSI)

**What is it?**\
RSI measures the speed and change of price movements to determine if an asset is overbought or oversold. It’s like a thermometer for market enthusiasm.

RSI ranges from 0 to 100; above 70 is overbought, below 30 is oversold.

**How is it used?**

* **Overbought/oversold**: Sell when RSI > 70, buy when RSI \< 30.
* **Divergence**: If price makes new highs but RSI doesn’t, a reversal may be coming.
* **Trend confirmation**: RSI above 50 supports bullish trends; below 50 supports bearish.

**How is it calculated?**

* **Average Gain/Loss**: Calculate the average gain and loss over a period (typically 14).
* **Relative Strength (RS)**: Average Gain / Average Loss.
* **RSI**: 100 - (100 / (1 + RS)).

RS = Average Gain / Average Loss  

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

<sub>The above content is designed for informational purposes only, and is explicitly not investment advice. Algo Pilot is a US based technology company and not a bank, broker-dealer, or RIA. As such, Algo Pilot LLC does not provide investment advice and is not a member, SIPC. Brokerage services offered by 3rd parties are not directly affiliated with Algo Pilot LLC, and Algo Pilot users may choose the broker relationship that they desire.</sub>