๐ What is RSI?
RSI = Relative Strength Index
It measures how strong or weak a price move is, based on recent gains vs losses.
The RSI value ranges from 0 to 100.
๐ข Key RSI Levels:
70 or above โ ๐ Overbought โ Might pull back or reverse.
30 or below โ ๐ข Oversold โ Might bounce up or reverse.
50 โ โ๏ธ Neutral zone โ Momentum balanced.
๐ How to Use RSI in Trading:
1. Overbought / Oversold Reversals
If RSI > 70 โ Watch for a potential drop (shorters may step in).
If RSI < 30 โ Watch for a potential bounce (buyers may step in).
Tip: RSI alone doesnโt mean "sell now" or "buy now" โ it shows a setup, not a signal.
2. Trend Confirmation
In a strong uptrend, RSI may stay above 50โ70 for a long time.
In a downtrend, RSI may stay below 50โ30.
So instead of betting on reversals, you can also use RSI to confirm trend strength.
3. RSI Divergence
A powerful signal (especially if you're watching price closely):
๐ปBearish divergence:
Price makes a higher high, but RSI makes a lower high โ โ ๏ธ Weakness is building โ May drop.
๐Bullish divergence:
Price makes a lower low, but RSI makes a higher low โ ๐ข Momentum is turning โ May rise.
๐ก How You Can Use RSI Right Now
While waiting in your trade:
Watch if RSI breaks above 60 โ ๐ผ stronger buying momentum.
If RSI dips below 50 โ โ ๏ธ be cautious โ momentum may weaken.
Good Luck!