StochRSI

AAA

DEFINITION of 'StochRSI'

An indicator used in technical analysis that ranges between zero and one and is created by applying the Stochastic Oscillator formula to a set of Relative Strength Index (RSI) values rather than standard price data. Using RSI values within the Stochastic formula gives traders an idea of whether the current RSI value is overbought or oversold - a measure that becomes specifically useful when the RSI value is confined between its signal levels of 20 and 80.

INVESTOPEDIA EXPLAINS 'StochRSI'

The StochRSI is deemed to be oversold when the value drops below 0.20, meaning the RSI value is trading at the lower end of its predefined range, and that the short-term direction of underlying security may be nearing a correction. Conversely, a reading above 0.80 suggests the RSI may be reaching extreme levels and could be used to signal a pullback in the underlying security.

RELATED TERMS
  1. Correction

    A reverse movement, usually negative, of at least 10% in a stock, ...
  2. Indicator

    Statistics used to measure current conditions as well as to forecast ...
  3. Overbought

    1. A situation in which the demand for a certain asset unjustifiably ...
  4. Oversold

    1. A condition in which the price of an underlying asset has ...
  5. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  6. Relative Strength Index - RSI

    A technical momentum indicator that compares the magnitude of ...
Related Articles
  1. Momentum And The Relative Strength Index
    Trading Strategies

    Momentum And The Relative Strength Index

  2. What is the difference between fast ...
    Trading Strategies

    What is the difference between fast ...

  3. What technical tools can I use to measure ...
    Trading Strategies

    What technical tools can I use to measure ...

  4. Would a slow stochastic be effective ...
    Trading Strategies

    Would a slow stochastic be effective ...

comments powered by Disqus
Hot Definitions
  1. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  2. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Budget Deficit

    A status of financial health in which expenditures exceed revenue. The term "budget deficit" is most commonly used to refer ...
Trading Center