Engineer who invented RSI, ADX and Parabolic SAR

J. Welles Wilder Jr.

J. Welles Wilder Jr. (1935-2021) was an American mechanical engineer and real-estate developer who turned to technical analysis and founded Trend Research Ltd. His 1978 book New Concepts in Technical Trading Systems introduced the Relative Strength Index, Average True Range, the Directional Movement system (ADX) and the Parabolic SAR. He moved to Christchurch, New Zealand in 1999.

What they argue

RSI readings above 70 mark overbought conditions and readings below 30 oversold ones, but he treated failure swings and divergences as the stronger evidence of a coming reversal.
An ADX above 25 indicates a strong trend, while an ADX below 20 indicates that no trend is present.
Traders who cannot manage their emotions should not be trading at all.

Sources

Wikipedia: J. Welles Wilder Jr.StockCharts ChartSchool: Relative Strength Index (RSI)StockCharts ChartSchool: Average Directional Index (ADX)

Summaries are Be The Puck's paraphrase of public material. Be The Puck has no affiliation with the people listed.

Books and papers

New Concepts in Technical Trading Systems (1978)
The Adam Theory of Markets or What Matters Is Profit (1987)
The Delta Phenomenon, or the Hidden Order in All Markets (1991)

The full reading list

Wilder's Parabolic SAR

Rule and full record

Trend following · daily

A stop that starts below price and speeds up as the trend runs. When price touches it, the trend is over.

Calls right38%150,125 closed calls on 377 stocks.

Beat buy and hold (Sharpe)51 of 375On raw return: 55 of 375.

In right now182 of 377As of the Oct 13, 2026 close.

Best risk-adjusted results against buy and hold:

POUIN GPROOUT ACOUT NFIIN BBOUT EQBOUT AIFIN HBMOUT LACOUT HIN PEYIN BTDROUT All 377 stocks →

Directional movement with ADX above 25

Rule and full record

Trend following · daily

Buy only when buyers are in control (+DI over −DI) and the trend is strong (ADX above 25). Sell when sellers take control.

Calls right33%49,187 closed calls on 377 stocks.

Beat buy and hold (Sharpe)46 of 375On raw return: 48 of 375.

In right now39 of 377As of the Oct 13, 2026 close.

Best risk-adjusted results against buy and hold:

NAMMOUT CRWVOUT ALABOUT SUPXOUT NPCEOUT ACOUT EFROUT PETOUT EOSEOUT ETHOUT GPROIN ATHOUT All 377 stocks →

J. Welles Wilder's Volatility System

Rule and full record

Breakouts & channels · daily

Wilder's stop-and-reverse system from the book that introduced average true range. Stay long until the close drops 3 average true ranges below the best close of the trade, then wait in cash until the close rises 3 ranges above the lowest close since.

Calls right35%57,099 closed calls on 377 stocks.

Beat buy and hold (Sharpe)62 of 375On raw return: 58 of 375.

In right now143 of 377As of the Oct 13, 2026 close.

Best risk-adjusted results against buy and hold:

SUPXOUT ETHOUT POUIN BTCIN BTEIN ARMOUT GPROOUT CAROUT GRT.UNOUT NFIIN NPCEOUT FLNCOUT All 377 stocks →

RSI 30/70 crossover

Rule and full record

Mean reversion · daily

The textbook use of Wilder's RSI: buy when it climbs back above 30 (oversold), sell when it drops back below 70 (overbought).

Calls right62%12,080 closed calls on 377 stocks.

Beat buy and hold (Sharpe)39 of 375On raw return: 39 of 375.

In right now156 of 377As of the Oct 13, 2026 close.

Best risk-adjusted results against buy and hold:

NAMMIN BBUCIN GEHCIN ATSIN PMZ.UNOUT ABNBIN ARMOUT APAOUT HOLOIN XLREIN QUTXIN FLNCIN All 377 stocks →