Designed by Tushard Chand and Stanley Kroll, StochRSI is an oscillator that measures the RSI (Relative Strength Index) level relative to its range over a set period. The indicator takes the RSI as a basis and applies the formula for Stochastics (Stochastic Oscillator) to it. The result is an oscillator that fluctuates between 0 and 1.
The RSI sometimes trades between 80 and 20 for extended periods without reaching overbought and oversold levels. Traders looking for opportunities to open a position based on overbought or oversold readings in the RSI can stay out of the game for a long time. To increase sensitivity and provide a method for identifying overbought and oversold levels in the RSI, Chand and Kroll developed StochRSI.