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What is the RSI indicator?

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Joe Collins

Lvl 7
5mo ago
Updated: 1/6/2025

RSI: Relative Strength Index

it is momentum indicator

very important to understand what is momentum indicator, it shows the strength of the trend momentum

so how RSI is an momentum indicator

when RSI is over 80, it shows the price of stock has rallied a lot and a correction will be near soon

but here's the catch

how much correction can never be measured by RSI

and traders who use RSI for trading fall in the trap losing money

when RSI is below 20, it shows downtrend momentum is lost and there will soon be some pull back

and then again how much pull back can never be measured by RSI

always see trend in RSI also, most important is VOLUME

if price is falling with high Volume, RSI doesn't matter

most significant indicators are trend and volume

use indicators like RSI, MACD in collaboration with them, but never take trading decision completely based on them

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John Smith

Lvl 7
5mo ago

What else can I help you with?