This article is from the Glossary of Technical Analysis Terms.
This indicator is defined as the ratio of an acutal price move to the expected random walk. If the move is greater than a random walk, and thus a trend is present, its index will be larger that 1.0
Rate of Change is used to monitor momentum by making direct comparisons between current and past prices on a continual basis. The results can be used to determine the strength of price trends. Note: This study is the same as the Momentum except that Momentum uses subtraction in its calculations while Rate of Change uses division. The resulting lines of these two studies operated over the same data will look exactly the same - only the scale values will differ.
This indicator was developed by Welles Wilder Jr. Relative Strength is often used to identify price tops and bottoms by keying on specific levels (usually "30" and "70") on the RSI chart which is scaled from from 0-100. The study is also useful to detect the following:
The Relative Strength Index requires a certain amount of lead-up time in order to operate successfully.The formula for calculating the RSI is:
The Renko charting method probably got its name from "renga", which is the Japanese word for bricks. Introduced by Steve Nison, a well-known authority on the Candlestick charting method, Renko charts are similar to Three Line Break charts except that in a Renko chart, a line is drawn in the direction of the prior move only if a fixed amount (i.e., the box size) has been exceeded. The bricks are always equal in size. Example: With a five unit Renko chart, a 20 point rally is displayed as four equally sized, five unit high Renko bricks.