The Stochastic formula applied to RSI rather than price. Normalises RSI's own swings to 0–100, exposing inner oscillations that RSI alone hides in narrow ranges.
Stochastic RSI (StochRSI) was introduced by Tushar Chande and Stanley Kroll in their 1994 book The New Technical Trader.
The idea is direct — apply the Stochastic formula to RSI rather than to price. If Stochastic asks "where does today's close sit in the recent range?", StochRSI asks "where does today's RSI sit in the recent range of RSI itself?"
When RSI drifts in a narrow band — say 45 to 55 — the price chart looks indecisive, and so does RSI. StochRSI stretches that small band back out to 0–100, revealing the inner oscillation hidden inside a flat-looking RSI. It is, in effect, momentum applied to momentum: a second derivative of crowd intensity.
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