Contrary to popular belief, the Relative Strength Index is a leading indicator. The RSI formula takes two common equations into account in solving the formula. The first composed equation obtains the initial value of the relative strength (RS), which is the ratio of the average closing price that is 'Up' to the average closing price that is 'Down' over the 'N' periods represented in the following formula:
RS = Average of 'N' days closes up / Average of 'N' days closes down
or
RS = Average of 'N' day's closes up / Average of 'N' day's closes down
Add the average of the closing sessions that are up and the result is divided by (number of days), then do the same process with the average of the closing sessions that are down, and the result is divided by (number of days), then divide the result of the average of the up sessions by the result of the average of the down sessions.
The actual RSI value is then calculated by indexing the indicator to 100, using the following formula:
Relative Strength Index = 100 - (100 / (1 + RS))
If you are using (MetaTrader (MT4, you can attach the RSI indicator to your MT4 chart, and simply drag and drop it into the main chart window. The image below illustrates this process:
