# Relative Strength Index (RSI)

Category: momentum

RSI measures the speed and magnitude of recent price changes to evaluate overbought or oversold conditions. It oscillates between 0 and 100.

## Formula

```text
RSI = 100 - (100 / (1 + RS))
where RS = Average Gain / Average Loss over N periods (default 14)
```

## Common strategies

- Overbought/oversold: RSI > 70 suggests overbought (sell signal), RSI < 30 suggests oversold (buy signal).
- Divergence: Price makes a new high but RSI doesn't — bearish divergence signaling potential reversal.
- Centerline crossover: RSI crossing above 50 indicates bullish momentum; below 50 indicates bearish.

## How CommonQuant uses it

CommonQuant AI agents use RSI as one of several momentum signals. The pre-calculated RSI(14) is available on all timeframes and can be referenced in DSL strategies via the rsi() function.

## Frequently asked questions

### What is a good RSI period?

The default RSI period is 14, which works well for most markets. Shorter periods (7-9) make RSI more sensitive, while longer periods (21-25) smooth it out.

### Is RSI > 70 always a sell signal?

No. In strong uptrends, RSI can stay above 70 for extended periods. It's best used alongside trend indicators and other confirmation signals.

Canonical: https://commonquant.ai/learn/indicators/rsi