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Profit Purify + Ultimate RSI

190
Range-Bound Oscillator

RSI values range from 0 to 100.

Typically, an asset is considered:

Overbought when RSI > 70 (may indicate a potential pullback or reversal).

Oversold when RSI < 30 (may suggest a possible bounce or upward move).

Default Period

Most traders use a 14-period RSI (can be adjusted for different timeframes).

Formula

R
S
I
=
100

(
100
1
+
R
S
)
RSI=100−(
1+RS
100

)
Where RS (Relative Strength) = Average Gain / Average Loss over the selected period.

Divergence

Bullish Divergence: Price makes lower lows, but RSI makes higher lows (potential upward reversal).

Bearish Divergence: Price makes higher highs, but RSI makes lower highs (potential downward reversal).

Failure Swings

Strong signals when RSI breaks below 30 (oversold) and then rises back above it, or breaks above 70 (overbought) and then falls back below.

Common Uses:
Trend Confirmation: RSI staying above 50 suggests bullish momentum, while below 50 indicates bearish momentum.

Entry/Exit Signals: Traders look for overbought/oversold conditions to time trades.

Combining with Other Indicators: Often used with moving averages, MACD, or support/resistance levels for stronger signals.

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