The Relative Strength Index (RSI) is a well versed momentum based oscillator which is used to measure the speed (velocity) as well as the change (magnitude) of directional price movements. Essentially RSI, when graphed, provides a visual mean to monitor both the current, as well as historical, strength and weakness of a particular market. The strength or weakness is based on closing prices over the duration of a specified trading period creating a reliable metric of price and momentum changes. Given the popularity of cash settled instruments (stock indexes) and leveraged financial products (the entire field of derivatives); RSI has proven to be a viable indicator of price movements.
RSI in AI Trader uses the typical 70 upper line and 30 lower line. When RSI is above 70, it is considered overbought thus generating a sell signal and if it goes below 30, it is considered oversold generating a buy signal.
The RSI uses 14 smoothing period. 70 overbought threshold and 30 oversold threshold.