Technical Indicators · RSI

The momentum oscillator behind every reversion call.

RSI compares the magnitude of recent gains to recent losses and outputs a 0–100 score. Below 30 the market is conventionally oversold; above 70 it is overbought. Vant8 uses RSI as a primary signal in the RSI strategy and as a confirmation or filter in several others. It is calculated with Wilder's smoothing, exactly as the standard textbook defines it.

What it measures

Momentum, normalised to 0–100

RSI takes the average of up-moves and down-moves over a lookback window and folds them into a single bounded score. A streak of green candles pushes the score up; a streak of red candles pushes it down. The bounded scale makes it easy to define overbought / oversold thresholds that work the same on any price level.

Overbought (≥ 70)

Strong recent up-moves dominate. Reversion strategies look for shorts here; trend strategies treat it as a take-profit signal.

Neutral (30 – 70)

No clear directional momentum dominates. Trend strategies care about other indicators in this band; reversion strategies stay out.

Oversold (≤ 30)

Strong recent down-moves dominate. Reversion strategies look for longs here; trend strategies typically pause new shorts.

Computation

Wilder's smoothing, no shortcuts

The first period is a simple average of gains and losses; subsequent periods use Wilder's exponential smoothing (weight 1 / period). This is the standard formula — we don't substitute EMA smoothing or take any other shortcut that would make the numbers look subtly different from charts you compare against.

RS = avgGain / avgLoss
RSI = 100 − (100 / (1 + RS))
Where avgGain and avgLoss are Wilder-smoothed over the configured period.
Defaults

The parameters we ship

These are the defaults the engine uses out of the box. You can override them per strategy from the strategy create form.

Period: 14

The standard lookback. Used across every Vant8 strategy that consumes RSI unless explicitly overridden.

Oversold: 30 (or 25 with HIGH risk profile)

The level below which the RSI strategy will enter a long. The default is 30. Selecting the HIGH risk profile when you create the strategy tightens this to 25 — entries then require a more extreme oversold reading before firing.

Overbought: 70

The level above which RSI signals an exit (for longs) or an entry (for shorts on perp).

Vant8-specific behaviour

Divergence detection on RSI strategy

Beyond the threshold cross, the RSI strategy looks for divergence — price making a new high while RSI fails to confirm it (and vice versa). Divergence is detected by tracking recent peaks and troughs on both price and RSI.

Bullish divergence

Price prints a lower low while RSI prints a higher low. The strategy treats this as a higher-conviction long signal than a plain oversold cross.

Bearish divergence

Price prints a higher high while RSI prints a lower high. The strategy treats this as a higher-conviction short or take-profit signal.

Where it shows up

Strategies that consume RSI

RSI Strategy
Primary entry — buys oversold, sells overbought after a confirming candle.
Mean Reversion
Confirmation — pairs RSI with Bollinger Band touches before fading the move.
Momentum
Filter — refuses to enter if RSI says the move is already exhausted.
MACD Strategy
Secondary — RSI shape is checked alongside MACD histogram expansion.
How to read it

Where RSI can mislead you

Strong trends pin RSI to extremes

In a strong uptrend RSI can stay above 70 for days. Treating that as a short signal in isolation will lose money. Trend-following strategies on Vant8 cross-check ADX before trusting an RSI extreme.

Not a timing tool on its own

An RSI extreme says momentum is stretched; it does not say when the move will reverse. The RSI strategy waits for a confirming candle close before acting, but you should still expect some drift past the threshold before any reversal.

Pick a strategy that uses RSI.

The strategies listed above are deployed from the Strategies page on your dashboard. Each one ships with sensible defaults you can tune before deployment.