Getting latest data loading
Home / Trading Opportunities / Education & Strategies / Relative Strength Index (RSI)

Relative Strength Index (RSI)

The information on this page is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.

The RSI is a useful indicator, which provides ‘overbought’ and ‘oversold’ signals. See the lower chart on the image below – a move above 70 tells us that an asset may be overbought (and therefore provides a sell signal), a move below 30 tells us that an asset may be oversold (and therefore provides a buy signal).




Relative Strength Index (RSI) is another momentum indicator, measuring speed and magnitude of directional price  movements, by looking at the ratio of higher closes versus lower closes. Shares with more, or stronger, positive changes have a higher RSI value than those with more or stronger negative changes. The indicator charts the current and past strength or weakness of a security compared to itself and should not be confused with Relative Strength, indicating the strength of one security versus another (i.e. Vodafone vs UK 100 ), nor with the different momentum indicator.


RSI is normally calculated using a 14-day period, although most charting packages allow this to be customised depending on one’s trading horizon. The indicator works over a 0-100 scale, with overbought and oversold levels at 70 and 30 respectively. Values above 70 and below 30 suggest stronger up/down momentum. For each trading period, an upward/downward change is calculated by subtracting the previous close from the current close for an upmove or the current from the previous for a down move. The 14-day EMA/exponential moving average is then calculated for each, and the result for upward moves divided by the result for down moves to derive the final RSI figure. When prices move up/down quickly, at some point they are considered overbought/oversold and a reversal may occur. The level of the RSI highlights the security’s recent strength in trading. Its angle of ascent/descent is directly proportional to the velocity of a change in the trend. The higher/lower it goes, the greater the magnitude of the price move. Shares can remain overbought/oversold for considerable periods once a trend is in place. Uptrends tend to remain between 40-80, while downtrends normally stay in between 20-60. One should thus wait for the RSI to cross back down/up through 70/30 for confirmation that a correction may be beginning (see caveat below). Another way of using the RSI for warning signs of a reversal are via divergence. When RSI is flattening out after an up move, and begins to turn down, but the shares are still rising, we can assume that the shares will soon begin to lose steam, their advance slow, the shares top out and eventually turn down, mirroring the RSI. This is an example of negative divergence. If the RSI turns up before the shares bottom out, this is positive divergence.




1. Black arrows indicate divergence between RSI and price potentially signalling a change in trend.

2. Overbought (>70) and oversold (<30) zones indicated with blue lines on lower chart

3. Circles indicate moves down from overbought or up from oversold.

4. Red parallel lines indicate RSI stuck in upper half (40-80), thanks to up-changes in price outweighing down-changes. This happens when price trend is strong.


RSI is one of many key indicators in technical analysis, its use helpful in the trade selection process. While some price patterns may appear to say one thing, with volume agreeing, a cursory glance at RSI may indicate that a short-term trend is losing steam. See page 2 for an example of RSI and divergence. As always, only when the share price itself confirms (break of trendline/cross of a moving average, etc) should a trade decision be made.


Technical indicators should never be relied upon in isolation for trading decisions, however strong a signal may be. Ultimately they are one of many indicators, which may, in the majority, be pointing the other way. Always use indicators such as moving averages in combination with other indicators (trendlines, price, price patterns, support/resistance, oscillators, etc) to assist in the final trading decision. Lastly, the current trend of a share should always be respected – pre-empting a change in trend more often than not proves costly.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.

4.81 Average

156 Reviews


I have found Accendo staff very helpful,,and informed. I have traded with you for some years now and have no regrets. Keep up the good work!

Posted 3 years ago

Shaun D

since signing up for Accendo I have had two traders, Mark and Sam. I have found both of these to be very informative about how CFD's work and they have made it very easy for me. Since working with Sam (last four months) my trading knowledge has improved and I can make more informative decisions about which Company's to invest with. Keep up the good work Sam.

Posted 4 years ago


I am very happy with the service I get from Accendo Markets and in particular Amrit Panesar. He is very professional and pleasant to speak to and this counts for a lot.

Posted 4 years ago

Shreekant P

Its a good site for dealing stocks worldwide and having good staff.

Posted 4 years ago

Nick W

Krishan Appiah is one of the most dedicated / informative broker I have ever had.

Posted 4 years ago

Thomas I

Since I have been trading with Accendo Markets I have experienced much greater success than has been my experience with other trading companies mainly due to the help given by, what I consider to be my terminal with the trading floor, Mark, who has been most helpful in reminding me of the progress of my positions throughout the day and keeping me in touch with those positions so that I can more easily make successful trades when appropriate instead of missing out on opportunities through lack of attention. He draws my attention to the situations and enables me to make profitable trades. I am very happy with the situation at the moment and am enjoying the experience. Thomas Irving.

Posted 4 years ago

Kartik A

Accendo markets keep me connected with the market and its very well followed by Mr. Krishan Appiah ,which helps me to take certain decision on time.

Posted 4 years ago

Peter p

I have been trading with Accendo Markets and James Abbott my account manager for coming on 5 years now, James Abbott the senior trader of Accendo Markets provides me with up to minute information when I need it and find him very easy and professional to deal with. Whenever I need to trade or am not sure about anything James is always their to help with any queries I may have. The Accendo Platform I find very easy to use and navigate although it has been slightly changed over the years but definitely for the better. Personal when I do trade 90% of the time, I rather telephone call to place my trade dealings and if James is not there to take my call I find others at Accendo like Sam, Lee take my trades and are. All in all everyone at Accendo Markets are amazing to deal with and my relationship with Accendo is just as I like it. Peter Petrou

Posted 4 years ago

Mrs. J

"Our Trader, Aymen Azizi, has been nothing but attentive to our every need throughout our long relationship with him. No issue is too small, full explanations on all our questions."

Posted 5 years ago

Brian R

I have been with Accendo for a long time now, ten or twelve year's, probably more . As I told Sam (my trader) I thought that CFDs were better than sex . I stopped trading for a few years and only started back about a couple of months ago. But it is as if I had never been gone , so to speak. Sam has helped me every step of the way, at my age one forgets things. I have only praise for Accendo and as far as I am concerned the platform is the best . Now I am back trading at 71 years of age, I might even try sex again. Brian Robertson.

Posted 5 years ago

Jim W

I understand how to make a profit with CFDs. I am restricted by the range of companies I have knowledge of. Although, I am not sure that is a big problem. Tom Robertson is a very fine man.

Posted 5 years ago

Rebekah S

Well, I would not be trading without the help of my trader, Sam Alnakkash. He provided a really great overview of Accendo Markets, an insight into trading in general and how to get started in trading online. His advice, support and training has been fantastic all along the way, enabling me to start trading earlier than I would have done had I not had the support. He has also been very adept at understanding me as a client in order to help me achieve my trading goals. I still have a lot to learn and hope I will get there.

Posted 5 years ago

Nick z

I like the updates on shares I trade. Updates from Bloomberg and Reuters plus industry updates and breaking news. I've had Matt Grice and James Abbott and found both to be excellent. I would like to continue a personal service with James. He understands how and which stocks I trade.

Posted 5 years ago

Steve O

Excellent, knowledgable broker interaction and communication, coupled with very good research and analysis.

Posted 5 years ago

William P

Being new to direct trading I needed help and was given all the time and advice that I needed to feel fully able to make decisions on what I wanted to invest in. I asked for and got exactly the type of info I required provided by Tom Cook, who I would recommend to anyone looking for help.

Posted 5 years ago

Mr. W

I have been dealing with accendo for the past 8 years my broker Amrit I find him very helpful when he is there lol and had many offers to change but will not do it Bill Roberts

Posted 5 years ago

Zoran N

Very good all round service! Timely market information. (charts + trends coverage ) On the ball accounts managers ,quickly available and alert . Part of my success owed to my personal manager Mr Sam Springet , than you.

Posted 5 years ago

Mr Brian C

Easy to deal with.....

Posted 5 years ago

Muhammed S

Accendo markets are great for trading cfds and their research is second to none! Aymen manages my account is extremely helpful and always keeps me updated on market info. Thanks again

Posted 5 years ago

Mr Buta B

Always available, whenever I call I get straight through to someone that can and will help. The staff are very knowledgeable, helpful and easy to talk to.

Posted 5 years ago

Stephen B

Aymen Azizi keeps an eye on what is happening in the market and informs me with timely relevancy, email call, and txt.

Posted 5 years ago