Relative Strength Index (RSI) is an oscillator that measures the speed and change of price movements. It ranges from 0 to 100 and is traditionally used to identify overbought or oversold conditions.
How it works?
Typically, a value above 70 indicates that an asset is overbought, while a value below 30 indicates it is oversold. However, in strong trending markets, RSI can remain in these zones for a long time.
Key signals:
- Overbought/Oversold: Return from extreme zones.
- Divergence: Discrepancy between price direction and the indicator chart.
- Centerline Crossover (50): Confirmation of a trend change.
At MarketLab, we use RSI as a supporting tool to filter false signals in our trading bots.
Disclaimer
This blog is for informational purposes only. It does not constitute financial or investment advice.
Trading cryptocurrencies and other financial instruments involves high risk. You may lose all your funds.
The author is not responsible for any financial losses resulting from the use of information from this blog.