Looking for a reliable way to spot market momentum and potential buy or sell signals? The Relative Strength Index (RSI) is a popular technical indicator that helps traders gauge whether an asset is overbought or oversold. In this article, you’ll learn how to calculate RSI using JavaScript, with clear explanations and practical code examples.
To calculate the RSI value, you first need to compute the average gain and average loss over a specified number of periods. These values are then used to determine the relative strength and, ultimately, the RSI using the following formula:
RSI = 100 – 100 / (1 + (average gain / average loss))
Start by determining the price change for each period. If the price increases, the change is positive and added to the total gain. If the price decreases, the change is negative and added to the total loss. Calculate the average gain and average loss by dividing the total gain and total loss by the number of periods used for the RSI.
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