# Stoch RSI

Stochastic RSI, or Stoch RSI, is a derivative of the Relative Strength Index (RSI). It is a momentum oscillator type of technical indicator. It oscillates between 0-100 values. RSI values closer to 0 indicate oversold market conditions, while values closer to 100 indicate overbought conditions. 

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StockHero Stoch RSI: a buy signal is generated when Stoch RSI is oversold, a sell signal is generated when Stoch RSI is overbought.
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![](https://4210655246-files.gitbook.io/~/files/v0/b/gitbook-legacy-files/o/assets%2F-M5LiMstpewrLGU6auaX%2F-M64F4B3n4bQbn0XA8jk%2F-M64NAGVQ-aWiQ3388gs%2FScreenshot%202020-04-29%20at%205.59.30%20PM.png?alt=media\&token=876d077e-6edf-45b3-9c86-66495b60a963)

Stochastic RSI values (red and blue lines) closer to 0 indicate overbought market conditions, while values closer to 100 indicate oversold conditions. Thresholds (yellow band) are usually assigned to Stochastic RSI values; anything below 20 indicates oversold, while values above 80 can indicate overbought. For time periods and trading intervals, lower thresholds may be used as a measure to reduce market noise or to produce a more confident signal.

```
RSI = 100 – 100/ (1 + RS)
RS = Average Gain of n days UP  / Average Loss of n days DOWN

Stoch RSI = (RSI - Lowest Low RSI) / (Highest High RSI - Lowest Low RSI)

Where:
n = Time Period
```