Oscillators (RSI) Flashcards
are chart indicators that can assist a trader in determining
overbought or oversold conditions in ranging (non-trending) markets.
Oscillators
is a popular oscillator that measures the extent of recent price changes to determine overbought or oversold conditions in an
instruments price.
RSI
developed the RSI
J. Welles Wilder Jr.
is a momentum indicator used in technical analysis.
relative strength index (RSI)
measures the speed and magnitude of a security’s recent price changes to evaluate overvalued or undervalued conditions in the price of that security.
RSI
provides technical traders with signals about bullish and bearish price momentum, and it is often plotted beneath the graph of an asset’s
price.
RSI
An asset is usually considered overbought when the RSI is above __ and
70
oversold when it is below ___.
30
True or False
the relative strength index does not compare a security’s strength on days when prices go up to its strength on days when prices go down.
False
the relative strength index compares a security’s strength on days when prices go up to its strength on days when
prices go down.
The RSI line crossing below the overbought line or above oversold line is
often seen by traders as a signal to ___________________.
buy or sell
when the RSI indicator crosses 30 on the RSI chart, it is a ________________
bullish sign
and when the RSI indicator crosses 70, it is a _____________.
bearish sign
During trends, the RSI
tends to stay above 30 and should frequently hit 70.
Uptrend
During Trend, it is rare to see
the RSI exceed 70. In fact, the indicator frequently hits 30 or below.
Downtrend
occurs when price moves in the opposite direction of the RSI.
RSI Divergence
occurs when the RSI displays an oversold reading followed by a higher low that appears with lower lows in the price.
Bullish Divergence
occurs when the RSI creates an overbought reading
followed by a lower high that appears with higher highs on the price.
Bearish Divergnce
may take place once the RSI reaches a high that is higher that its previous high at the same time that a security’s price reaches a lower high.
Negative RSI reversal
may take place once the RSI reaches a low that is lower than its previous low at the same time that a security’s price reaches a low that is higher than its previous low price.
Postive RSI reversal
