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Indicators
RSI Indicator: Complete Trading Guide
6 min read
Key Takeaways
- 1RSI >70 = overbought (potential sell), <30 = oversold (potential buy), but trend can stay extended.
- 2Divergence: Price makes new high/low but RSI doesn't = reversal warning; strongest signal.
- 350 line: Above = bullish bias, below = bearish; use for trend direction confirmation.
- 4Use with structure: RSI oversold + support = strong long; RSI overbought + resistance = strong short.
- 5Period setting: 14 (standard), 7 (faster/noisier), 21 (slower/smoother). Adjust to timeframe.
- 6Avoid trading RSI signals against strong trend; wait for divergence or range-bound conditions.
Summary
“RSI measures momentum, not direction. Best used for divergence and confluence with structure.”
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