Stochastic RSI (StochRSI)
Overview
Stochastic RSI applies the Stochastic Oscillator formula to RSI values instead of raw price, creating an oscillator of an oscillator that is extremely sensitive to momentum shifts. It is a favourite tool of crypto traders who need early reversal signals on short timeframes. Pair StochRSI with price structure and volume confirmation from our indicator guide library to filter out the inevitable noise.
How It Works
StochRSI = (RSI − Lowest RSI over N) / (Highest RSI over N − Lowest RSI over N). It oscillates between 0 and 1 (or 0-100 when scaled). Default settings typically use a 14-period RSI with a 14-period Stochastic lookback, plus K and D smoothing.
Key Signals
- StochRSI above 0.80 = overbought; below 0.20 = oversold.
- K line crossing above D line from oversold = bullish entry signal.
- K line crossing below D line from overbought = bearish entry signal.
- StochRSI divergence from price can precede sharp reversals.
Common Mistakes
- Treating every overbought/oversold reading as a trade — StochRSI signals are too frequent without filters.
- Using StochRSI without trend context — only trade in the direction of the larger trend.
- Not smoothing StochRSI with K and D periods — the raw output is extremely noisy.
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Ultimate Oscillator
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RSI — Relative Strength Index
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TSI — True Strength Index
The True Strength Index applies a double-smoothing technique to price momentum, producing a clean oscillator that reveals overbought/oversold conditions and trend direction with minimal noise. TSI signals are particularly reliable on daily charts across <a href="/market/stocks" class="text-primary hover:underline">stocks</a> and <a href="/market/crypto" class="text-primary hover:underline">crypto</a>. Combine TSI crossovers with the <a href="/academy/indicators/macd" class="text-primary hover:underline">MACD</a> for layered momentum confirmation in your <a href="/strategies" class="text-primary hover:underline">trading strategies</a>.