📊 Capital Market Chronicles – Episode 312: TECHNICAL ANALYSIS – RELATIVE STRENGTH INDEX (Part II)
“Inside the RSI Engine ⚙️”
Alright… time to pop the hood open 🔧😄
Don’t worry—we’re not doing rocket science here 🚀
(Your chart already did the hard work!)
⚙️ How RSI Works
RSI compares:
👉 Recent gains vs recent losses
If gains are stronger → RSI goes up 📈
If losses dominate → RSI goes down 📉
📊 The Famous Formula (Don’t Panic 😄)
RSI = 100 − (100 / (1 + RS))
Where RS = Average Gain / Average Loss
😄 Translation into Human Language
- More buying pressure → RSI rises
- More selling pressure → RSI falls
That’s it. Simple. No headache needed 😄
⏱️ Default Setting
Most traders use:
👉 14 periods (days)
Why 14?
Because it gives a balanced view—not too fast, not too slow
🎯 What the Numbers Mean
- RSI above 70 → “Too much excitement” 🥳
- RSI below 30 → “Too much panic” 😨
😄 Quick Example
Stock rallies strongly → RSI = 80
Market:
“This is amazing!” 🚀
RSI:
“Calm down… you’re getting carried away 😅”
🧠 Key Insight
📌 RSI measures momentum, not price.
A stock can still go up… even if RSI says “overbought”! 👀
🔚 What’s Next?
Now comes the real magic ✨
In the next episode:
- Overbought & Oversold signals
- Divergence (the hidden warning system) 🚨
This is where RSI becomes truly powerful 😎
⚠️ Disclaimer: This Blog is for general guidance only and does not replace personalised financial advice.
🌐 Stay tuned to Our Blog https://www.stockmarketpedia.in/home/blog — where we decode the stock market one laugh at a time. 😎💰
📖 Craving deeper dives and serious know-how (minus the financial snoozefest)? Surf over to: https://www.stockmarketpedia.in/
📚 Prefer your reading with chai in one hand and market wisdom in the other? Now available on Amazon Kindle
Stock Market Decoded - A Beginner's Guide to Smart Investing by P. Shirley — perfect for sounding smarter than your portfolio at dinner parties.
Money Money Money – Tickling You into an Investing Habit by P. Shirley — the nudge your lazy rupees have been waiting for.
Want to open an account with Mirae Asset Sharekhan?
Got burning questions about bulls, bears, or bizarre market behaviour?
Ping us at: stockmarketpedia4u@gmail.com
WhatsApp: 8300840449
© 2026 Stock Market Pedia. All Rights Reserved
No comments:
Post a Comment