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RSI or Relative Strength Index is probably the most popular technical indicator used by Forex traders. RSI is a momentum indicator that tries to find the areas of overbought and/or oversold by considering the magnitude of recent losses and gains. This indicator by default considers the last 14 sessions as recent sessions. Most charting tools give you the ability to change this period. The value of RSI changes between 0 and 100. If the value drops below 30 the market is considered to be oversold and values above 70 represent overbought conditions. These levels can be changed by most charting tools. RSI is a better tool when used in ranging markets or when the trend is also taken into account.

Welles Wilder has also developed many other well-known indicators such as ATR (Average True Range) and Parabolic SAR (Stop and Reversal Indicator).

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