Relative strength index (RSI)

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    The relative strength index (RSI) is a technical indicator used to indicate when market conditions are overbought or oversold. When these signals occur, a trader can use them to look for pullbacks or reversals.

    It is calculated by averaging the number of up and down periods, as a way of showing the underlying relative strength.

    When the RSI reaches 30, it signals an “oversold” market

    When the RSI reaches 70, it signals an “overbought” market.

    The RSI indicator is usually displayed underneath a chart pattern for clearer analysis.

    RSI

    Further reading

    To learn more about the RSI and how other indicators help determine price action, visit: