Exactly what I said to expect on RXMD with the RSI
Post# of 2559
Posted On: 03/03/2016 12:34:18 PM
Re: INSTATRADER #2199
Exactly what I said to expect on RXMD with the RSI levels in the Nose Bleed Zone, a correction. Sorry, but I thought for some reason that you were arguing about the 'Power Zone' vs when the RSI is in the overbought levels of 70+. That is absolutely the incorrect title, although most use it.
All good.
And for those who mistakenly believe and told that the RSI above 70 is the 'Power Zone', please understand that the RSI above 70 is NOT a power zone, but rather an overbought level, although a stock can continue to rise a bit higher. But the higher it goes, the more overbought it becomes. It's a technical indicator which works very well, IF one truly understands its function.
Developed J. Welles Wilder, the Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. RSI oscillates between zero and 100. Traditionally, and according to Wilder, RSI is considered overbought when above 70 and oversold when below 30. Signals can also be generated by looking for divergences, failure swings and centerline crossovers. RSI can also be used to identify the general trend.
RSI is an extremely popular momentum indicator that has been featured in a number of articles, interviews and books over the years. In particular, Constance Brown's book, Technical Analysis for the Trading Professional, features the concept of bull market and bear market ranges for RSI. Andrew Cardwell, Brown's RSI mentor, introduced positive and negative reversals for RSI. In addition, Cardwell turned the notion of divergence, literally and figuratively, on its head.
Wilder features RSI in his 1978 book, New Concepts in Technical Trading Systems. This book also includes the Parabolic SAR, Average True Range and the Directional Movement Concept (ADX). Despite being developed before the computer age, Wilder's indicators have stood the test of time and remain extremely popular.
http://stockcharts.com/school/doku.php?id=cha..._index_rsi
All good.
And for those who mistakenly believe and told that the RSI above 70 is the 'Power Zone', please understand that the RSI above 70 is NOT a power zone, but rather an overbought level, although a stock can continue to rise a bit higher. But the higher it goes, the more overbought it becomes. It's a technical indicator which works very well, IF one truly understands its function.
Developed J. Welles Wilder, the Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. RSI oscillates between zero and 100. Traditionally, and according to Wilder, RSI is considered overbought when above 70 and oversold when below 30. Signals can also be generated by looking for divergences, failure swings and centerline crossovers. RSI can also be used to identify the general trend.
RSI is an extremely popular momentum indicator that has been featured in a number of articles, interviews and books over the years. In particular, Constance Brown's book, Technical Analysis for the Trading Professional, features the concept of bull market and bear market ranges for RSI. Andrew Cardwell, Brown's RSI mentor, introduced positive and negative reversals for RSI. In addition, Cardwell turned the notion of divergence, literally and figuratively, on its head.
Wilder features RSI in his 1978 book, New Concepts in Technical Trading Systems. This book also includes the Parabolic SAR, Average True Range and the Directional Movement Concept (ADX). Despite being developed before the computer age, Wilder's indicators have stood the test of time and remain extremely popular.
http://stockcharts.com/school/doku.php?id=cha..._index_rsi
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