RSI (Relative Strength Index) is a popular momentum oscillator used to measure the speed and change of price movements. It helps traders identify overbought and oversold conditions in the market.

How RSI Works
RSI is calculated on a scale from 0 to 100.
It compares the average gains and losses over a set period, usually 14 periods (candles/bars).

Key Levels:
Above 70 → Overbought → price may reverse downwards
Below 30 → Oversold → price may reverse upwards
Between 30–70 → Normal trend, no extreme conditions

Why Traders Use RSI
Identify Overbought/Oversold Conditions
Helps spot potential reversal points before price changes direction.

Spot Divergences
When price makes a new high/low but RSI does not, it signals a potential trend reversal.

Confirm Trends
RSI can confirm if a trend is strong or weakening.

Tips for Using RSI
Combine RSI with other indicators (moving averages, support/resistance) to improve accuracy.
Use different timeframes to see both short-term and long-term momentum.
Avoid trading based on RSI alone — it’s more reliable when combined with price action.