Every figure, definition and claim this video puts on screen, with where it comes from.
RSI was created by J. Welles Wilder and published in 1978. Wilder set it out in New Concepts in Technical Trading Systems, Trend Research, 1978. Source: J. Welles Wilder, New Concepts in Technical Trading Systems, Trend Research, 1978. Source: StockCharts ChartSchool, Relative Strength Index (RSI) — https://chartschool.stockcharts.com/table-of-contents/technical-indicators-and-overlays/technical-indicators/relative-strength-index-rsi
The formula on screen is the published one.
RSI = 100 - 100 / (1 + RS), where RS is the average gain divided by the average loss over
the lookback period. The two columns the video builds are those two averages: every closing
change in the window sorted into gains and losses, each side averaged over the period.
Source: StockCharts ChartSchool, Relative Strength Index (RSI).
The default lookback is fourteen periods. “The default look-back period for RSI is 14, but you can lower it to increase sensitivity or raise it to decrease sensitivity.” Source: StockCharts ChartSchool, Relative Strength Index (RSI).
Seventy and thirty are the conventional levels. “When the RSI is above 70, it generally indicates overbought conditions; when the RSI is below 30, it indicates oversold conditions.” Both are drawn on every oscillator pane in this video. Source: StockCharts ChartSchool, Relative Strength Index (RSI).
The averages are smoothed, so the window is not a hard cut off. Wilder seeds the first average as a simple mean of the first fourteen changes and smooths every value after that, which leaves earlier bars a decaying influence rather than none at all. The sliding window in this video shows the simple form of that average, which is the part the lookback setting controls and the part that makes the reading a statement about recent bars rather than about the whole chart. Source: J. Welles Wilder, New Concepts in Technical Trading Systems, Trend Research, 1978.
Bearish regular divergence is a higher high in price against a lower high in the oscillator. “A bearish divergence forms when the security records a higher high and RSI forms a lower high. RSI does not confirm the new high and this shows weakening momentum.” Source: StockCharts ChartSchool, Relative Strength Index (RSI).
Divergence is misleading in a strong trend, and a trend can print it repeatedly. “Before getting too excited about divergences as great trading signals, it must be noted that divergences are misleading in a strong trend.” And: “A strong uptrend can show numerous bearish divergences before a top materializes.” Source: StockCharts ChartSchool, Relative Strength Index (RSI).
Bearish divergence is characteristic of uptrends rather than of tops. Andrew Cardwell’s reading of divergence differs from Wilder’s: “Cardwell considered bearish divergences to be bull market phenomena. In other words, bearish divergences are more likely to form in uptrends. Similarly, bullish divergences are considered bear market phenomena and are indicative of a downtrend.” Source: StockCharts ChartSchool, Relative Strength Index (RSI), on Andrew Cardwell. Source: Constance Brown, Technical Analysis for the Trading Professional, McGraw-Hill.
The oscillator’s working range shifts with the trend. “RSI tends to fluctuate between 40 and 90 in a bull market (uptrend) with the 40–50 zones acting as support”, and “RSI tends to fluctuate between 10 and 60 in a bear market (downtrend) with the 50-60 zone acting as resistance”. This is why a reading that looks extreme in a range is ordinary in a trend. Source: Constance Brown, Technical Analysis for the Trading Professional, McGraw-Hill, via StockCharts ChartSchool, Relative Strength Index (RSI).
An uptrend is a series of higher highs and higher lows. “An uptrend is defined by prices that form a series of rising peaks and rising troughs (higher highs and higher lows).” A downtrend is the same statement inverted. Source: StockCharts ChartSchool, Dow Theory — https://chartschool.stockcharts.com/table-of-contents/market-analysis/dow-theory
The uptrend is intact until a lower low forms. “An uptrend is considered in place until a lower low forms and the ensuing decline exceeds the previous low.” That is the event the video marks as the break, and it is a price event rather than an oscillator one. Source: StockCharts ChartSchool, Dow Theory.
Every chart in this video is generated rather than taken from a market, and each one is tagged Illustrative on screen for that reason. They are there to show a mechanism, and none of them is offered as a record of what any instrument did.
The series the video follows is built from a stated model: a base, then four upward pushes whose realised drift falls at each stage, at 2.59, 1.12, 0.33 and 0.22 per cent per bar. That declining rate is the argument itself rather than a decoration, and it is why the same divergence shape completes four separate times across one move. The seed was chosen against that property rather than for its shape, so the chart on screen genuinely has the structure the video says it has.
Every percentage the video prints is a property of that model and is arithmetic off the series on screen: the upside after each of the four prints, the share of each series that sits inside a completed divergence, the block by block step sizes, and the distance between the divergence and the structure break. The comparison between the trending series and the flat one uses two series of the same length with the same indicator settings, and the only difference between them is drift.
The two paths that share a start, a finish and a bar count are constructed to do so, which is the point being made: the same price outcome over the same number of bars produces two different readings, because the reading is a function of how the move was made rather than of where it ended.