WHAT IS THE RSI INDICATOR š
RSI STANDS FOR RELATIVE STRENGTH INDEX. IT'S A MOMENTUM OSCILLATOR (a tool that constructs high and low bands between two extreme values and then builds a trend indicator that fluctuates within these bounds) THAT MEASURES THE SPEED AND CHANGE OF PRICE MOVEMENTS š
MOST INVESTORS USE RSI AS A TECHNICAL ANALYSIS INDICATOR THAT SHOWS IF AN ASSET IS OVERBOUGHT OR OVERSOLD AND CAN SIGNAL A TREND CHANGE.
š§® How it works:
ā¢ RSI compares an asset's strength on days when prices go up to its strength on days when prices go down.
ā¢ The indicator consists of 100 points. Traditionally, RSI is considered overbought if its value is above 70 and oversold if it is below 30.
āļø How to use it:
ā¢ If the price is rising but the RSI is falling ā this is a bearish deviation, suggesting a potential price drop.
ā¢ When the price falls while the RSI rises ā this is a bullish deviation, signaling that the price will likely increase soon.
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