RSI: Identifying Overbought and Oversold Extremes
The Core Idea: RSI measures the speed and change of price movements on a scale of 0 to 100. It tells you when a move is getting overextended.
Mastering the Signal: Look for the 70 level for “Overbought” (potential sell) and 30 for “Oversold” (potential buy) conditions.
Survivor’s Edge: Don’t just trade the levels. The real power of RSI lies in “Divergence”—when price makes a new high but RSI fails to follow, a massive reversal is usually brewing.
Link: RSI Standard