The RSI is a technical trading system that traders and investors use to analyze the price movements of a stock or other asset. This indicator measures the strength of an asset's movement by comparing the average gains and losses over a given period, usually 14 days.
The RSI is displayed on price charts and moves in a range between 0 and 100. When the RSI is above 70, the asset is considered overbought, but when it falls below 30, it is considered oversold. Traders use these levels as potential signals to buy or sell that asset.
An important aspect of this indicator is when a bullish divergence occurs. This happens when the price chart shows a lower low but the RSI shows a higher low. This can indicate that the price may turn around and start an upward move, which would provide buying opportunities.
Overall, the RSI is a useful tool for traders and investors to potentially identify trends and market movements. It can provide valuable insights into the price movements of an asset, which would help in making informed decisions when buying or selling.
Always perform DYOR
