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RSI
(Relative Strength Index)
RSI (Relative Strength Index) is a momentum oscillator measuring overbought (RSI >70) or oversold (RSI <30) conditions on a 0-100 scale. Developed by J. Welles Wilder, it compares recent gains to losses (typically 14-day period).
Day traders pair RSI with MACD for entry/exit signals. For example, an RSI below 30 might suggest a buying opportunity in S&P500 stocks. However, RSI can stay extreme in strong trends (e.g., Bitcoin's 2021 bull run). The SEC warns against relying solely on RSI due to false signals. It works best with volume analysis and P/E valuations.
Day traders pair RSI with MACD for entry/exit signals. For example, an RSI below 30 might suggest a buying opportunity in S&P500 stocks. However, RSI can stay extreme in strong trends (e.g., Bitcoin's 2021 bull run). The SEC warns against relying solely on RSI due to false signals. It works best with volume analysis and P/E valuations.