Charting and Studies User Guide - CQG.com

Relative Strength Index (RSI)
Page 321
Relative Strength Index is a price momentum indicator. Mathematically, RSI is represented as:
RSI = 100 - [100/(1+RS)]
where,
RS is the ratio of the smoothed moving average of n-period gains divided by the absolute value
(that is, ignoring sign) of the smoothed moving average of n-period losses.
RSI quantifies price momentum. It depends solely on the changes in closing prices. Despite its
name, it has nothing in common with the traditional relative strength concept, whereby the
price of a stock is divided by a broad market index (such as Standard & Poor's 500 Index) to
arrive at a ratio that shows the trend of a stock’s performance relative to the general market.
Instead, the RSI is actually a front-weighted price velocity ratio for only one item (a stock
futures contract, or an index).
Charting and Studies User Guide