RSI STRATEGY
RSI Strategy – Trading Momentum, Overbought & Oversold Levels
The Relative Strength Index (RSI) is one of the most popular momentum indicators in trading. It helps you understand when a market is overbought, oversold, or showing hidden strength or weakness. Used correctly, RSI can give powerful entry and exit signals.
📌 What Is RSI?
RSI is a momentum oscillator that moves between 0 and 100. It measures the speed and change of price movements over a certain period (most commonly 14 candles).
- 📊 Above 70: Traditionally considered overbought
- 📉 Below 30: Traditionally considered oversold
- 📈 50 line: Bullish vs Bearish momentum
⚠️ Important: RSI works best when combined with trend and support/resistance.
🎯 Core RSI Entry Concepts
🟢 Oversold in Uptrend
Look for RSI near 30 in an uptrend.
🔴 Overbought in Downtrend
RSI above 70 in bearish trend can signal short.
📉 RSI Divergence
Signals weakening trend.
📈 RSI Trend Line Break
Early momentum shift.
🧩 Basic RSI Strategy (Beginner-Friendly)
Example: Using RSI with trend and support/resistance.
Long Setup (Buy)
Uptrend → Support → RSI near 30 → Bounce
Uptrend → Support → RSI near 30 → Bounce
Short Setup (Sell)
Downtrend → Resistance → RSI near 70 → Drop
Downtrend → Resistance → RSI near 70 → Drop
Use RSI with trend
Combine with S/R
Avoid every RSI touch
