Forex technical aspects: how does the relative strength index work?

The Relative Strength Index (RSI) - indicates the relative strength of buyers and sellers in a market, and is mainly used to detect overbought and oversold phenomena. Its value is between 0 and 100, when the RSI is overbought at 70-100, it can be airdropped; when it is oversold at 0-30, it can be placed more.

(1) RSI calculation formula:

RS = average number of rising closing prices in X days/average number of falling closing prices in X days; RSI = 100- (100/1 + RS).

Rising closing average = (UAVx (n-1) + M)/n.

Declining closing average = (DAVx (n-1) + L)/n.

UAV - Average of the previous day's rising closing price.

DAV - Average of the previous day's declining closing price.

M - the closing price increase for the day (if the price decreases by M = 0).

L - the decrease in the closing of the day (if the price rises L = 0).

N - Time interval. RSI generally has a period of 14 days.

But distortion is inevitable, so you can only use it, not rely on it.