Indicators · Beginner

Understanding RSI

A 1-minute lesson from the MarketPro academy, one of 22 in trading indicators.

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Short answer

The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and size of recent price changes, scaled between 0 and 100, to give a sense of whether a market has moved unusually far in one direction. RSI readings above 70 are commonly labeled "overbought," suggesting recent gains have been unusually strong, while readings below 30 are labeled "oversold," suggesting recent losses have been unusually sharp.

The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and size of recent price changes, scaled between 0 and 100, to give a sense of whether a market has moved unusually far in one direction.

Reading The Scale

RSI readings above 70 are commonly labeled "overbought," suggesting recent gains have been unusually strong, while readings below 30 are labeled "oversold," suggesting recent losses have been unusually sharp. These labels describe recent momentum, not a guaranteed reversal point.

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