Abstract:

Every trader aims to correctly predict future asset prices, although their practices vary widely in many cases. They use various business systems based on various prediction methods to make these predictions. The paper deals with RSI as the cornerstone of the prediction of future prices of financial assets. The aim of the paper is to explore the possibility of using RSI as a tool for predicting bankruptcy market positions. In the first chapter of our paper we discuss the theoretical background on which the RSI is based. Its meaning, interpretation and calculation. The second chapter is devoted to a detailed description of divergences, their characteristics and basic ideas on the basis of which divergences are used as a business signal. In the third chapter of our work, we described in detail the application of the RSI to the selected financial instrument and defined the input and output characteristics. We summarized and interpreted the obtained data. We believe that this article can be a valuable contribution to identifying and predicting bankruptcy and profitable market positions.