WHAT IS THE RSI INDICATOR ๐
RSI STANDS FOR RELATIVE STRENGTH INDEX. IT'S A MOMENTUM OSCILLATOR (a tool that constructs high and low bands between two extreme values and then builds a trend indicator that fluctuates within these bounds) THAT MEASURES THE SPEED AND CHANGE OF PRICE MOVEMENTS ๐
MOST INVESTORS USE RSI AS A TECHNICAL ANALYSIS INDICATOR THAT SHOWS IF AN ASSET IS OVERBOUGHT OR OVERSOLD AND CAN SIGNAL A TREND CHANGE.
๐งฎ How it works:
โข RSI compares an asset's strength on days when prices go up to its strength on days when prices go down.
โข The indicator consists of 100 points. Traditionally, RSI is considered overbought if its value is above 70 and oversold if it is below 30.
โ๏ธ How to use it:
โข If the price is rising but the RSI is falling โ this is a bearish deviation, suggesting a potential price drop.
โข When the price falls while the RSI rises โ this is a bullish deviation, signaling that the price will likely increase soon.
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