RSI is calculated using an exponential moving average which correctly avoids the problem of erratic movement. The time period used for calculating RSI varies. The most widely used is 14 days. Other popular lengths are 20, 10, 8, 7, and 5 days. Since RSI is a ratio, its range is limited from 0 to 100.
The Equis International MetaStock System Testing rules for RSI are:
Enter long: RSI<30
Close long: RSI>70
