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Relative Strength Index (RSI): how it is calculated and how to read it

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The relative strength index (RSI) on a real stock

Open in the chart
Momentum oscillator · from 0 to 100 · 14 sessions · J. Welles Wilder, 1978
RSI — Relative Strength Index
Example: Meta Platforms, sessions of 2025 · 14-day RSI, thresholds 70 and 30 · adjusted prices
volumeperiod start 597.3614 sessions above 709 sessions below 30788.82483.57665.95Jan 2, 2025Apr 3, 2025Jul 3, 2025Oct 1, 2025Dec 30, 2025
30 · oversold5070 · overbought55.614-day RSI
Sessions249Above 7022Below 3019Longest run above 7014 sessions

Below the price, the RSI: the two amber bands in the panel are the overbought and oversold zones. On the price, amber marks the sessions with the RSI above the upper threshold, blue those below the lower one.

InteractiveRead a session. Click a day on the chart or on the panel: I tell you the close, the RSI and which zone it is in.

70 · 30 the two classic thresholds above 70 overbought, below 30 oversold: zones, not signals

What the RSI is made of

Fig. 1 · Anatomy

70503014-day RSIpricewhen it speeds up, the RSI risesoverboughtabove 70the 50 lineabove it, gains prevailoversoldbelow 30
  • The RSI is a line that moves between 0 and 100, in a panel below the price.
  • It compares the gains and the losses of the last 14 sessions: the more the gains weigh, the higher it goes.
  • Above 70 it is called overbought, below 30 oversold.
  • At 50 gains and losses are in balance.
RS = average gain / average loss  ·  RSI = 100 − 100 / (1 + RS)
first average = sum of the n changes / n  ·  then average = (previous average × (n − 1) + today’s value) / n

How to read the RSI: 70, 30 and the 50 line

Fig. 2 · Overbought and oversold

705030overbought · above 70oversold · below 30entersexitsenters
  • Above 70: over the last sessions gains have been much stronger than losses.
  • Below 30: the opposite.
  • It measures how strong the move has been: it is not a forecast.
  • Many analysts watch the move back below 70 or above 30, rather than the entry into the zone.

Fig. 3 · In a strong trend it stays above 70

705030the price keeps risingweeks above 70
  • In a strong uptrend the RSI enters the overbought zone and stays there for weeks.
  • Meanwhile the price keeps rising.
  • Above 70 means “strong advance”, not “about to fall”.
  • That is why 70 and 30 are not a signal on their own.

Fig. 4 · The 50 line

705030uptrenddowntrendcrosses below 50
  • Above 50 the average gain is larger than the average loss; below 50 it is the other way round.
  • In an uptrend the RSI spends most of its time above 50.
  • A move from one side to the other often goes with a change of trend.

Fig. 5 · The trend shifts the zones

7030uptrenddowntrendbetween 40 and 80between 20 and 60
  • In an uptrend the RSI swings higher: often between 40 and 80.
  • In a downtrend it swings lower: often between 20 and 60.
  • That is why 30 is rarely seen in a strong uptrend, and 70 in a strong downtrend.

RSI divergence and the failure swing

Fig. 6 · Bearish divergence

705030higher highlower high
  • The price makes a higher high, the RSI a lower high.
  • The second advance had less strength than the first.
  • Bullish divergence is the mirror image: lower lows in the price, higher lows in the RSI.
  • It is a warning, not an order: confirmation comes from the price.

Fig. 7 · The failure swing

705030peak above 70pullback lowstops lowerbreaks below: failure swing
  • The RSI rises above 70, pulls back, rallies again but stops below its previous peak.
  • The failure swing is complete when the RSI falls below the low of its pullback.
  • It is read on the RSI alone, without looking at the price.
  • The bottom version is the mirror image, below 30.

Rules of use for the RSI

six things to keep in mind

170 and 30 are zones, not signals

  • they say the move has been strong
  • they do not say when it will end

2The trend comes first

  • in a strong uptrend overbought lasts for weeks
  • the same reading means different things in an uptrend and in a downtrend

Meta Platforms, 2025: 14 sessions in a row above 70, from January 28, 2025 to February 14, 2025

3The 50 line

  • above 50 gains prevail, below it losses do
  • it is the watershed between strength and weakness

4Divergence warns

  • price and RSI do not confirm each other: the move is losing strength
  • confirmation comes from the price, not from the indicator

5The failure swing

  • a lower RSI peak after an overbought reading
  • it is complete below the low of the pullback

6The period sets the character

  • 9 sessions: a jumpy line that often reaches the thresholds
  • 25 sessions: a calm line that rarely reaches them

The RSI formula and calculation, step by step

Meta Platforms, the first sessions of the series

The calculation starts on : by the time 2025 begins, Wilder’s smoothing already has 128 sessions behind it. Closes are shown to two decimals, exactly as the page uses them, so the calculation can be redone by hand.

The first 15 closes of Meta Platforms and the 14 changes behind the first RSI value, in dollars
SessionCloseChangeGainLoss
502.21———
507.01+4.804.80—
507.46+0.450.45—
537.27+29.8129.81—
526.73−10.54—10.54
527.41+0.680.68—
532.07+4.664.66—
510.19−21.88—21.88
496.43−13.76—13.76
493.73−2.70—2.70
487.39−6.34—6.34
459.73−27.66—27.66
473.52+13.7913.79—
474.46+0.940.94—
485.01+10.5510.55—
Sum65.6882.88
The first RSI value of Meta Platforms, at the close of
StepCalculationResult
Average gain65.68 / 144.6914
Average loss82.88 / 145.9200
RS, the relative strength4.6914 / 5.92000.792
RSI100 − 100 / (1 + 0.792)44.21
From the second value on: Wilder’s 14-session smoothing, over the next three sessions
SessionCloseGainLossAverage gainAverage lossRSI
486.301.290(4.6914 × 13 + 1.29) / 14 = 4.4485(5.9200 × 13 + 0) / 14 = 5.497144.73
459.01027.29(4.4485 × 13 + 0) / 14 = 4.1307(5.4971 × 13 + 27.29) / 14 = 7.053836.93
451.1907.82(4.1307 × 13 + 0) / 14 = 3.8357(7.0538 × 13 + 7.82) / 14 = 7.108535.05

Intermediate values are rounded: redoing the calculation by hand, the last digit may differ. A platform that starts from a different date gives slightly different values for the first few weeks, then the same ones.

RSI settings: 9, 14 or 25 sessions

Fig. 8 · The same move, three periods

70309 sessionsjumpy: reaches 70 and 30 often703014 sessionsWilder’s classic703025 sessionscalm: rarely gets there
  • 9 sessions: the line is jumpy and often reaches 70 and 30.
  • 14 sessions: the period Wilder proposed, and the most widely used.
  • 25 sessions: the line is calm and rarely reaches the thresholds.
  • With short periods or strong trends, wider thresholds are often used: 80 and 20.
The RSI of Meta Platforms in 2025 with three different periods, thresholds 70 and 30
PeriodSessions above 70Sessions below 30Highest RSILowest RSI
9 sessions322791.9 · 17.6 ·
14 sessions221984.0 · 23.1 ·
25 sessions7074.5 · 30.01 ·

Interactive exerciseYour turn: find overbought and oversold

Meta Platforms, sessions of 2025 · 14-day RSI, thresholds 70 and 30
  1. Click a session in which the RSI was overbought: above 70.
  2. Now a session in which it was oversold: below 30.
  3. Read the verdict: the page tells you the RSI value and the reason.
Click here: a session with the RSI above 70

No session yet. You can click on the price or on the RSI panel: the dashed line keeps the two windows aligned.

InteractiveTry the settings

the RSI panel redraws as you go
RSI sessions
Thresholds
Sessions above 7022out of 249 in 2025
Sessions below 3019out of 249 in 2025
Between the thresholds84%208 sessions
Longest run above 7014 sessionsfrom to
With 14 sessions and 70-30 thresholds, in 2025 the RSI of Meta Platforms was above 70 on 22 sessions and below 30 on 19, out of 249. The longest overbought run lasted 14 sessions, from to : over those sessions the close went from $672.21 to $734.35.

Where to go from here

The indicators · Momentum and oscillators

The other lessons in the guide

What is technical analysis

  • the study of price and volume to recognise the trend and the levels
  • three premises: price discounts everything, trends, history repeats
  • exercise: uptrend, downtrend or sideways on three real charts

Candlestick chart

  • the four prices of a session: body and shadows
  • green and red, long and short bodies, long shadows, the doji
  • find the candle on a real chart: the judge says yes or no with the numbers

Uptrend: higher highs and higher lows

  • higher highs and higher lows: how to recognize an uptrend
  • swing points, and the two signals that end a trend
  • mark the higher lows yourself on a real chart

Support and resistance

  • the level where the decline stopped, and the one where the rise stopped
  • touches, time and volume: how much a level counts; once broken, it switches roles
  • find the level yourself on a real chart: the judge counts the touches
The RSI on Meta Platforms, in the chartopens on the stock: switch the RSI on from the indicator catalogueOpen a free accountcharts, indicators and watchlists without paying anything
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Frequently asked questions

What is the relative strength index (RSI)?

The relative strength index (RSI) is an oscillator that runs from 0 to 100 and measures the strength of recent gains against recent losses, usually over 14 sessions. J. Welles Wilder introduced it in 1978.

How is the RSI calculated?

Separate the gains and the losses of the last 14 sessions and average each. RS is the average gain divided by the average loss, and RSI = 100 − 100 / (1 + RS). From the second value on, the two averages are updated with Wilder’s smoothing.

What does an RSI above 70 mean?

That over the last sessions gains have been much stronger than losses: the stock is called overbought. It is not a signal on its own: in 2025 the 14-day RSI of Meta Platforms stayed above 70 for 14 sessions in a row, from January 28, 2025 to February 14, 2025.

Which RSI period is better: 9, 14 or 25?

No period is better than the others. With 9 sessions the line is jumpier and reaches the thresholds often; with 25 it is calmer and rarely reaches them. 14 is the period Wilder proposed and the default on almost every platform.

Method and sources

The sources of this page: the books are cited, the text is ours
Source
J. Welles Wilder Jr., New Concepts in Technical Trading Systems, Trend Research, 1978: the Relative Strength Index.
John J. Murphy, Technical Analysis of the Financial Markets: chapter 10, oscillators and contrary opinion.
Charles D. Kirkpatrick and Julie R. Dahlquist, Technical Analysis (CMT curriculum): momentum oscillators.
Constance Brown, Technical Analysis for the Trading Professional: the RSI ranges in trending markets.

The chart uses the Meta Platforms sessions from our archive, adjusted for dividends and corporate actions; we calculate the RSI ourselves on closes rounded to two decimals, starting from . The numbered figures are diagrams drawn to explain, not prices. This guide explains how the tools work: it does not contain investment recommendations and promises no returns. Our method · licence · report an error.