Stochastic RSI
The stochastic formula applied to RSI values rather than to price, showing where RSI sits within its own recent range.
Formula
StochRSI = (Current RSI - Lowest RSI over n) / (Highest RSI over n - Lowest RSI over n)
Unit
ratio (x, times)
In depth
Applying one indicator to another produces a far more sensitive series that reaches its bounds constantly, which is the intended effect and also the main hazard — signal frequency rises sharply while information does not. It is an indicator of an indicator of price, three transformations from any market event, and its readings should be interpreted with correspondingly less weight. It is most defensible when RSI itself is confined to a narrow band and its internal position carries some descriptive value. Nothing here suggests it predicts price direction.
Worked example
Over 14 periods RSI ranged from 38 to 68, a span of 30. With RSI now at 62, StochRSI = (62 - 38) / 30 = 0.80 — near the top of its own range while RSI itself is nowhere near 70.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Stochastic RSI” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.