#TradingTools101
How to Use the Relative Strength Index in Trading:
The Relative Strength Index (RSI) is used by traders to analyze market momentum and make informed decisions about entry and exit points from trades. When trading in a market that is in an uptrend, traders typically wait for the indicator to show an overbought condition (reading above 70), then watch for the RSI to drop below the 50 level, which may indicate a long-term buying opportunity as the uptrend continues.
In down markets, a rise in the RSI reading toward 50 after an oversold condition (reading below 30) may be used as a sell signal or to strengthen short positions.