RSI — Relative Strength Index
What it is and how it is calculated
RSI measures how strong recent price moves have been — whether buyers or sellers have been in control over the last candles. It is shown as a number from 0 to 100.
Firedrake uses the classic RSI settings:
- period 14 — the last 14 candles of the timeframe;
- close prices of the candles;
- Wilder smoothing — the standard way RSI is smoothed, the same as on most charting platforms.
In simple terms: RSI compares the average size of the up-moves with the average size of the down-moves. When up-moves dominate, RSI rises towards 100; when down-moves dominate, it falls towards 0; when they are balanced, it stays near 50.
RSI is live — it includes the candle that is still forming, so the value changes with the price during the candle.
What it is for
- Overbought / oversold. Readings above 70 mean the price has risen fast and may be stretched; readings below 30 mean it has fallen fast and may be oversold. In the terminal these values are highlighted in red (>70) and green (<30).
- Momentum. RSI above 50 means buyers have the upper hand on that timeframe, below 50 — sellers.
- Filtering out weak moments. A narrow RSI range lets a strategy skip contracts that are already overheated (for longs) or already exhausted (for shorts).
Important: in a strong trend RSI can stay above 70 or below 30 for a long time. "Overbought" does not mean "will fall now".
How to use it
In the screener and in strategies
RSI is set as a range from–to for each timeframe. Both bounds are included. A contract matches when its RSI on that timeframe is inside the range.
- A range of 0–100 (or an empty range) means the RSI condition is off.
- If RSI is not available for a contract on that timeframe, the contract does not match an active RSI condition.
Typical settings
| Idea | Setting | Why |
|---|---|---|
| Buy a pullback, not the top | 1h RSI 35–60 for a long | Avoids entering when the move is already stretched. |
| Catch an oversold bounce | 15m RSI 0–30 for a long | Looks for a sharp drop that may rebound. |
| Short an overheated rally | 15m RSI 70–100 for a short | Looks for a stretched rise. |
| Trade with momentum | 4h RSI 50–75 for a long | Higher timeframe confirms buyers are in control without being extreme. |
Combinations
- RSI + MRC zone. RSI below 30 together with an Oversold MRC zone is a stronger signal than either alone: the price fell fast and far from its fair value. See Mean Reversion Channel.
- RSI + cloud on a higher timeframe. Take oversold RSI on 5m/15m only when the 1h cloud is blue — you buy dips inside an uptrend instead of catching a falling knife. See Clouds.
- RSI across timeframes. A low RSI on 15m with a neutral RSI (45–60) on 4h usually means a short-term dip in a healthy market; low RSI on every timeframe means a broad sell-off.
Ready-made screener filter sets: Monitoring in the Screener.