Relative Strength Index (RSI)
The Relative Strength Index (RSI) is a momentum oscillator used to measure the speed and change of price movements. However, RSI does not directly measure trend direction and is often used with other indicators.
The RSI is calculated using the following formula:
RSI = 100 - [100 / (1 + RS)]
RS (Relative Strength) is the average gain over a specified period divided by the average loss.
The RSI value is then plotted on a scale of 0 to 100.
RSI above 70 suggests 'overbought' conditions and the potential for a price drop. RSI below 30 indicates 'oversold' conditions and the potential for a price rise
RSI Divergence
RSI Divergence is used to predict reversals in price.
Standard Divergence:
Bullish Divergence - when price hits new lows and RSI does not, it suggests a potential upward price reversal.
Bearish RSI Divergence - when price hits new highs and RSI does not, it suggests a potential downward price reversal.
Hidden Divergence:
Hidden Bullish Divergence - when price makes higher lows, but the RSI makes lower lows. It suggests the continuation of an uptrend.
Hidden Bearish Divergence - when price makes lower highs, but the RSI makes higher highs. It indicates the continuation of a downtrend.
Rangers Visualizer
RSI values, standard and hidden divergences, and divergence scores can be viewed in the Lendal Pro Trader: Rangers Visualizer.
Rangers Settings
RSI Source
Specifies the data source used for the RSI calculation.
Open - open price
High - highest price
Low - lowest price
Close - closing price
Hl2 - average of high + low price (H+L/2)
Hlc3 - average of high + low + close price (H+L+C/3)
Ohlc4 - average of open + high + low + close price (O+H+L+C/4)
Hlcc4 - average of high + low + double-weighted close (H+L+C+C/4
Higher Timeframe
Divergence
Determines whether standard divergence, hidden divergence, or both are used to determine trend direction.
Required RSI Score (Divergence)
This determines the minimum RSI score required for the algorithm to fire an alert.
Required RSI Score (Divergence) is used exclusively by the Rangers algorithm.
Required RSI Score (Confluence)
Take Profit RSI Score (BULL)
Take Profit RSI Score (BEAR)
RSI Period
This determines the period over which RSI will be calculated. Increasing the period will reduce the frequency of signals but make them more reliable. Divergences over longer periods are stronger and less susceptible to volatility.
RSI Pivot Presets
Presets with higher values will reduce the frequency of signals but make them more reliable. Divergences over longer periods are stronger and less susceptible to volatility.
Pivot Right Strength
This sets the number of candles to the right of a pivot on which the RSI will be calculated. Increasing this value increases the strength of the previous pivot. This results in less frequent but more reliable signals as divergences over longer periods are stronger and less susceptible to volatility.
Pivot Left Strength
This is the number of candles to the left of a pivot on which the RSI will be calculated. Increasing this value increases the strength of the previous pivot. This results in less frequent but more reliable signals as divergences over longer periods are stronger and less susceptible to volatility.
Conditional Period Begin
Sets the minimum lookback period in which an RSI divergence must be present for the algorithm to use it in calculations.
Conditional Periods End
This sets the maximum lookback period in which an RSI divergence must be present for the algorithm to use it in calculations.
Strategy
Std. Deviation Period
Std. Deviation
Minimum Volatility
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