What Is the RSI Indicator and How to Use It
The RSI is one of the most popular momentum indicators. Here’s what it measures and how traders read it.
On this page
The Relative Strength Index (RSI) is a momentum oscillator that moves between 0 and 100, measuring the speed and size of recent price changes. It’s one of the most widely used tools in technical analysis.
Reading the RSI
- Above 70 — traditionally “overbought”; the move may be stretched.
- Below 30 — traditionally “oversold”; a bounce may be due.
- Around 50 — neutral momentum.
Note that in a strong trend, RSI can stay overbought or oversold for a long time — so these levels are signals to pay attention, not automatic buy/sell triggers.
Divergence — the powerful signal
Divergence happens when price makes a new high but RSI doesn’t (bearish), or price makes a new low but RSI doesn’t (bullish). It can hint that momentum is fading before price turns.
Using it well
RSI works best alongside support and resistance and price action — not alone. Combine it with a plan and a stop-loss, and avoid acting on a single indicator.
This is educational content, not a recommendation to trade.
