It was invented by Wells Wilde.The principle is to predict the market movement trend by calculating the range of stock price rise and fallIntensityAnd predict the continuation or turn of the trend accordingly.In fact, it shows that the upward fluctuation of stock price accounts for the totalFluctuation rangeOfpercentageIf the value is large, the market is in a strong state;If the value is small, the market is weak.Usually, this indicator is calledRSI indexThis is an important indicator for market measurement, but its role is closely related to the market value of stocks and futures: large plates have small fluctuations, while small plates have large fluctuations.Electronic spotThis indicator has also been used. There is a related introduction in the E-spot home.
The specific calculation method is:
RSI（n）=A/（A+B）×100%
Where, A refers to the extent of upward fluctuation of stock price in n days, and B refers to the extent of downward fluctuation of stock price in n days.A+B indicates the total fluctuation range of the stock price during this period.
Application principle
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Relative strength index
(1) ReceiveCalculation formulaNo matter how the price changes, the value of the strength indicator is between 0 and 100. ⑵If the strength index remains above 50, it meansStrong marketIf it is lower than 50, it meansWeak market。
⑶ The strength index mostly fluctuates between 70 and 30.When the six day index rises to 80, it means that the stock market hasOverboughtPhenomenon: once the stock price continues to rise and exceeds 90, it means that it has reached the warning area of serious overbought, and the stock price has formed a head, which is likely to reverse in a short term.
⑷ When the six day strength index drops to 20, it indicates that the stock market is oversold. If it continues to fall below 10, it indicates that it has reached a severely oversold area, and the stock price is likely toStop falling and pick upOpportunities.
⑸ The oversold and overbought value of each type of stock is different.
Relative strength index
In a bull market, usuallyblue-chip shareIf the strength index of is 80, it isOverboughtIf it is 30, it is oversold. As for twoTriple strandIf the strength index is 85 to 90, it is overbought; if it is 20 to 25, it is oversold.However, we cannot rigidly use the above values to formulateblue-chip shareWhether the second and third tier stocks are overbought or oversold is mainly due to the fact that some stocks have their own set of overbought/oversold levels, that is, stocks with repeated share prices usually have a high overbought value (90 to 95) and a low value (10 to 15) that is regarded as oversold.As for those stocks with stable performance,OverboughtThe value of is lower (65 to 70), and the value of oversold is higher (35 to 40).Therefore, before we take a buy/sell action on a stock, we must first find out the overbought/oversold level of the stock.As for measuring the overbought/oversold level of a stock, we can refer to the strength index records of the stock in the past 12 months.
Relative strength index
(6) The determination of the scope of overbought and oversold also depends on two factors.The first is the characteristics of the market. A stable market with small fluctuations can generally be set at more than 70OverboughtBelow 30 is oversold.The market with drastic changes can stipulate that over 80% is overbought and under 20% is oversold.The second is the time parameter taken when calculating RSI.For example, for the RSI on the 9th day, it can be specified that 80 or more is overbought and 20 or less is oversold.For the 24 day RSI, it can be specified that 70 or more is overbought and 30 or less is oversold.It should be noted that overbought or oversold does not in itself constitute a signal to enter the market.Sometimes the market changes too quickly, and RSI will soon exceed the normal range. At this time, RSI overbought or oversold often loses its role as a warning signal for market entry and exit.For example, in the early days of a bull market, RSI tends to quickly enter the region above 80 and stay in this region for a long time, but this does not mean that the rising market will end.On the contrary, it is a strong performance.Only in the end of a bull market or a bear market,OverboughtIs a relatively reliable signal to enter the market.For this reason, it is generally inappropriate to take buying and selling actions once RSI enters the abnormal area.It is better to trade when the price itself sends a turn signal.This can avoid RSI entry similar to that mentioned aboveoverbought But it does not immediately return to the "trap" like the normal area.In many cases, the good trading signal is: RSI entryOverbought and oversoldDistrict, and then cross the line of overbought or oversold to return to the normal area.However, we still need to get confirmation from the price side before we can take practical action.This confirmation can be:
(7) When the strength index is compared with the stock price or index,Regular meetingsProduce the characteristics that show the future market trend in advance, that is, the strong and weak indicators rise before the stock price or index rises, and the strong and weak indicators decline before the stock price or index falls. Its characteristics are most obvious at the peak and bottom of the stock price.
(8) When the strength index rises and the stock price falls, or the strength index falls and the stock price rises, this situation is called "divergence".When the RSI is above 70 to 80, the price level breaks the top but the RSI cannot, which forms a "top back gallop". When the RSI is below 30 to 20, the price level breaks the bottom but the RSI cannot break the bottom, which forms a "bottom back gallop".This strength index and stock price changeDeviation phenomenon , usually a signal that the market is about to undergo a major reversal.
andOverboughtLike oversold,Divergence It does not constitute an actual selling signal in itself, but only indicates that the market is in a weak position.The actual investment decision should be made after the price itself has also confirmed the shift.Although this confirmation process will cause investors to lose some profits when the market does reverse, it can avoid the wrong selling decision that investors may make when the situation does not reverse later.Relatively speaking, this error will cause greater losses to investors, because sometimes the market will temporarily lose momentum and then regain momentum, while the price does not have a large-scale shift.
commercial pressEnglish Chinese Dictionary of Securities InvestmentExplanation:Relative strengthIndicator name.Use singular number.In English: relative strength index;relative strength analysis；strength。Often used as an abbreviation: RSI.By American Wells?The technical analysis index invented by Welles WilderPrice fluctuationCompare the average rise and fall in.That is, the relative strength of the buyers and sellers in the transaction process.The index range is 0-100. If the index is above 70, it meansOverboughtInvestors should consider selling stocks;On the contrary, when the index falls to 30, it means that the market is oversold and investors can purchase.See: relative strength;relative strength rank。
principle
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The principle of RSI is simply to figure out the power comparison between buyers and sellers. For example, if there are 100 people facing a commodity and more than 50 people want to buy it, they compete to raise the price,commodity priceMust rise.On the contrary, if more than 50 people compete to sell, the price will naturally fall.
intensityIndex theoryIt is believed that any sharp rise or fall in the market price will change between 0-100, according toNormal distributionIt is believed that the RSI value mostly changes between 30 and 70, and it is generally considered that the market has reached at 80 or even 90Overbought state(Overboght), so farmarket priceIt will naturally fall back and adjust.When the price drops below 30, it is considered oversold, and the market price will rebound.
Here, "extremely strong", "strong", "weak" and "extremely weak" are only relative analytical concepts.
purpose
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1. Top and bottom points – 30 and 70 are usually oversold andOverboughtSignals.
2. Divergence – When the market conditions hit a new high (low) but the RSI is not at a new high, this usually indicates that the market will reverse.
3. Sustainability and resistance – RSI can display support andResistance level, sometimes it can reflect support and resistance more clearly than price chart.
4. Price trend form – compared with the price chart, the price trend form is as followsDouble roofAnd head and shoulder are more clear on RSI.
5. Peak to turn – When the RSI breaks through (surpassing the previous high or low point), it may mean that the price will have a sudden change, which is the same as other indicators. The RSI needs to be used together with other indicators, and cannot generate signals alone. The confirmation of the price is the key to determining the entry price.
Research and judgment standard
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The research and judgment of RSI mainly focuses on the value of RSI, the intersection of long-term RSI and short-term RSI, and the curve shape of RSI.General analysis methods mainly include the scope of RSI value, oversold and overbought situation of RSI value, position and intersection of short-term and long-term RSI lines, etc.
Here, "extremely strong", "strong", "weak" and "extremely weak" are only a relative analytical concept and a relative region.Some investors can also take them as 30, 70 or 15, 85.In addition, for different parameters of the RSI and different stocks, the size of the value of the RSI will be different, which will be described in detail in the following section.
1. When the RSI value exceeds 80, it means that the whole market is too strongMuch greater thanEmpty partyPower, the power of both sides is very different, and the market is in theOverbought state, the subsequent market may have a callback or turn, at this time, investors can sell stocks.
2. When the RSI value is lower than 20, it means that there are more thanBid The strength of the air side is stronger than that of many parties. After the air side made a big attack, the market fell too muchOversold conditionThe stock price may rebound or turn, and investors can build positions and buy stocks in an appropriate amount.
3. When the RSI value is around 50, it indicates that the market is in a state of consolidation and investors can wait and see.
4. For the definition of overbought and oversold areas, investors should be determined according to the specific conditions of the market.In general market roads, RSI values above 80 can be calledoverbought Below 20, it can be called an oversold area.However, sometimes in special ups and downs, the division of RSI's oversold and overbought areas depends on the specific situation.For example, in a bull market or forBull stock, overbought areaDeterminable90 or more, but in a bear market or forBear stockThe oversold area can be set below 10 (this is relative to the RSI with small parameter settings. If the parameter settings are large, the RSI is difficult to reach above 90 and below 10).
Long term and short term crossing
Short term RSI refers to RSI with relatively small parameters, while long-term RSI refers to RSI with relatively long parameters.For example, the RSI on the 6th and the RSI on the 12th are short-term RSI and long-term RSI.The intersection of long and short term RSI lines can be used as a method for us to study and judge the market.
1. When short-term RSI>long-term RSI, the market belongs toBull market；
2. When short-term RSI ＜ long-term RSI, the market belongs toShort market；
3. When the short-term RSI line breaks through the long-term RSI line at a low position, it is generally the "gold cross" of the RSI indicator, which is a buying signal;
4. When the short-term RSI line breaks through the long-term RSI line at a high level, it is generallyRSI indexOf“Death crossover”, forSell signal。
The average increase is in a certain period of timeriseThe average of the number is in the same period of timeDeclineThe average of the numbers.For example, if we want to calculate the nine day RSI, we should first find out the average number of rises and falls in the previous nine days,For exampleAs follows:
Average increase on the tenth day=(4.20+3.10+1.50+3.40+2.80)/9=1.67
Average decline on the tenth day=(1.40+1.70+3.90+8.40)/9=1.71
The tenth day RSI=[1.67 ÷ (1.67+1.71)] × 100=49.41
If the closing price on the eleventh day is 25.30, then
Average increase of the eleventh day=(1.67× 2.10)÷9=1.72
The average decline of the eleventh day=1.71 × 8 ÷ 9=1.52
The 11th day RSI=[1.72 ÷ (1.72+1.52)] × 100=53.09
Based on this, the RSI of the next few days can be calculated.Similarly, the RSI of any other number of days can be calculated according to this method.At least how many days of RSI is appropriate.firstRSI indexWhen it is proposed, it takes 14 days, and 14 days becomes the default value.But in practice, analysts often think that 14 days is too long, and only 5 days and 9 days are available.[1]
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⑴Relative strength indexIt can show that the market is oversold andOverbought，Expected priceHowever, RSI can only be used as a warning signal, which does not mean that the market trend is bound to develop in this direction. Especially in the case of severe market fluctuations, oversold and oversold, overbought and overbought. At this time, it is necessary to refer to the comprehensive analysis of other indicators, and cannot rely solely on the RSI signal to make a purchase or sale decision.⑵ The signals of deviation from the trend are usually ex post history, and there is no reversal of the market after the deviation.Sometimes, the real reversal is to deviate from the first or the second time. Therefore, we must constantly analyze historical data in this regard to improve our experience.
⑶ In the cowhide market, the RSI hovers between 40-60, although it sometimes breaks through the resistance line andPressure line, but there is no actual change in price.
