RSI: The Relative Strength Index
A 1-minute lesson from the MarketPro academy, one of 26 in technical analysis.
RSI compares the size of recent gains to recent losses over a lookback window (14 periods by default) and plots the result from 0 to 100. High readings mean recent candles were dominated by gains; low readings mean losses dominated.
What RSI measures
RSI compares the size of recent gains to recent losses over a lookback window (14 periods by default) and plots the result from 0 to 100. High readings mean recent candles were dominated by gains; low readings mean losses dominated. It measures momentum, not value.
The classic zones — and their misuse
Readings above 70 are called overbought and below 30 oversold. The most common beginner mistake is treating these as automatic reversal signals. In a strong trend, RSI can sit above 70 for weeks while price keeps climbing. Overbought means strong recent momentum — strength is not, by itself, a reason to sell.
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Lesson 5 of 26 in Technical analysis
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Not investment advice. Past performance is not indicative of future results.