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Indicators · 4 min
RSI: overbought and oversold
RSI is a number from 0 to 100 that shows how strongly the price has risen or fallen recently.
70 and 30
RSI above 70 means a strong run-up (overbought). Below 30 means a sharp fall (oversold). It doesn't mean an instant reversal.
Use it with the trend
In an uptrend, RSI dipping to 30-40 is often seen as a buying chance. In a strong trend RSI can stay above 70 for a long time.
Settings
The usual setting is 14. Smaller (like 7) gives more signals and more mistakes; larger is slower but cleaner.
Quiz (3 questions)
1. RSI at 75 means…
2. The usual RSI setting?
3. What does oversold (below 30) really mean?
This is for learning only, not advice on any stock or trade.