Relative Strength Index - MetaTrader 4 Script | Trading Script Download - MT4/MT5 Resources - MetaTrader 5 Resources

A popular way to analyze the RSI is to look for divergences where a security makes a new high but the RSI fails to surpass the previous high.

This divergence signals an imminent reversal. When the RSI then turns lower and breaks below the recent low, it is said to have completed a "failure swing."

A failed move is considered confirmation that a reversal is imminent.

relative strength index

The following RSI signals are used in chart analysis:

Tops and Bottoms <br />The relative strength index typically has tops above 70 and bottoms below 30. It usually forms these tops and bottoms before the underlying price chart.

chart pattern
RSI often forms chart patterns, such as a head and shoulders or a triangle, which may or may not be visible on a price chart.

Failure swing (support or resistance breakout)
This is the point at which the RSI exceeds a previous high (peak) or falls below a recent low (trough).

Support and Resistance Levels <br />The Relative Strength Index sometimes shows support and resistance levels more clearly than the price itself.

Divergence <br />As mentioned above, divergence occurs when price makes a new high (or low) that is not confirmed by a new high (or low) on the Relative Strength Index. Price usually corrects and moves in the direction of the RSI.

This is the main formula for RSI calculation:

RSI = 100 - (100 / (1 + U / D))

Where:
U——the average number of positive price changes;
D——The average number of negative price changes.

Technical specifications

A complete description of the Relative Strength Index can be found in the Technical Analysis: Relative Strength Index section

Attachment download

📎rsi.mq4 (4.69 KB)

Source: MQL5 #7677