Learn Trading Indicators
Master the indicators that power the TrAIde AI Score
Relative Strength Index (RSI)
The RSI is a momentum oscillator that measures the speed and change of price movements.
What is RSI?
RSI is calculated from price changes over a 14-period window and ranges from 0-100: - **Above 70**: Overbought (potential sell signal in standard analysis) - **Below 30**: Oversold (potential buy signal in standard analysis) - **50**: Neutral midpoint
TrAIde's Inverted Approach
Instead of the traditional overbought/oversold logic, TrAIde **inverts the meaning**: - **Low RSI (<30) = OVERSOLD = BUY SIGNAL** (panic selling, opportunity) - **High RSI (>70) = OVERBOUGHT = SELL SIGNAL** (euphoria, overextension)
This inverted logic aligns with contrarian trading principles: buy when others are panicking, sell when they're euphoric.
How TrAIde Uses RSI
1. **7-Day Averaging**: We average RSI across 7 daily candles, not just one 2. **0.6 Dampener**: We multiply the RSI effect by 0.6 to reduce false signals in ranging markets 3. **Bonus Flags**: - RSI < 30 adds +20 to the score (buy bonus) - RSI > 70 subtracts -20 from the score (sell penalty)
The result: RSI contributes ~33% to the final TrAIde Score, but only when sustained over a week.