# Relative Strenght Index

<mark style="color:purple;">`rsi`</mark>([*<mark style="color:blue;">candles</mark>*](/function/functions/candles.md): *List*\[\[[*<mark style="color:blue;">Candle</mark>*](/function/structures.md#candle)]], *period*: *int* = 14, *column*: *str* = "*close*") -> *List*\[*Decimal*]

* Parameters:

  * *candles*: *List*\[\[[*<mark style="color:blue;">Candle</mark>*](/function/structures.md#candle)]]
  * *period*: *int, default 14*
  * *column: str, deafault 'close'*

  OHLCV - Open high low close
* **Returns: Decimal**

  Returns number, in range \[0,100], that indicates that the market is oversold or overbought.

<details>

<summary>Example:</summary>

</details>

## Relative Strenght Index (RSI)

Offering insights into the speed and extent of price movements to assess whether an asset is overbought or oversold. By gauging recent price changes, it provides valuable signals regarding the strength of a trend, aiding traders in making informed decisions.

Key Insights:

* the RSI helps traders detect bullish or bearish momentum
* A reading above 70 typically signals that an asset is overbought, while a reading below 30 suggests it is oversold.
* In certain market conditions, when the RSI crosses below the overbought level or above the oversold level, traders may interpret this as a signal to buy or sell.
* The RSI is most effective within trading ranges and less reliable in trending markets.

$$
\textbf{RSI}=100-\left( \frac{100}{1+\frac{\text{Average Gain}}{\text{Average Loss}}} \right)
$$

### How the RSI Functions:

The RSI compares the average strength of an asset’s price movements on up days to its strength on down days. By doing so, it provides a ratio that helps assess whether the security is experiencing an overextension in either direction. This comparison, when interpreted alongside price movements, offers traders a glimpse into potential future price behavior.

When used in conjunction with other technical indicators, the RSI can enhance a trader's ability to make informed decisions, refining entry and exit strategies.

The Significance of RSI:

* Trend Validation and Reversals: RSI aids traders in confirming prevailing trends and signaling potential reversals.
* Overbought and Oversold Conditions: It helps identify when securities may be excessively bought or sold, offering an early warning for price corrections.
* Short-Term Signals: For short-term traders, the RSI can serve as a valuable tool, providing actionable buy and sell signals.
* Complementary to Other Indicators: The RSI is most potent when used alongside other technical indicators, offering additional support to trading strategies.


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