# Glossary of Technical Analysis Terms: R

## Description

This article is from the Glossary of
Technical Analysis Terms.

# Glossary of Technical Analysis Terms: R

**Randow Walk Index**:

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**:

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.

**RSI - Relative Strength Index**:

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:

- Movement which might not be as readily apparent on the bar
chart
- Failure swings above 70 or below 30 which can warn of
coming reversals
- Support and resistance levels
- Divergence between the RSI
and price which is often a useful reversal indicator

The Relative Strength Index requires a certain amount of lead-up
time in order to
operate successfully.The formula for calculating the RSI is:

- rsi=100-(100/1-rs)
- rs= average of x day's up closes
divided by average of x day's down closes

**Renko Chart**:

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.

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