Introduction to Relative Strength Index
The indicator was developed by J. Wallace Wilder. For the first time, the Relative Strength Index was introduced in June 1978 in the journal Commodities (now known as Futures), and then published in his book “New concepts in technical trading systems” and has since become one of the most popular oscillators assessing the strength of the movement. The Relative Strength Index compares the value of recent asset price rises with the magnitude of its falls and provides this information in the form of a number ranging from 0 to 100. The only parameter of the relative strength index is the time period used in the calculation.
Note: Be careful, since the name Relative Strength is quite common in various types of technical market analysis , for example, John Murphy’s Relative Strength analysis or indicators that show the relative strength of various securities in the stock market. It must be remembered that the Relative Strength Index is…