oussama94
05-28-2017, 01:38
The RSI or Relative Strength Index is an
indicator that measures the strength of all
upward movements against the strength of all
downward movements, and identifies turning
points by indicating overbought and oversold
levels. In trending markets, it can detect
momentum change; while in ranging markets,
it can spot overbought or oversold conditions.
The RSI gives a reading between 0 and 100.
If it is greater than 50, the upward force is
stronger than the downward force, and if it is
below 50, the downward force exceeds the
upward force. For us to derive any signal from
the RSI though, we normally look for readings
greater than 70 or 80, or below 30 or 20. An
RSI above 70 indicates that the instrument we
are looking at is overbought, pointing to a
potential sell opportunity. A more conservative
trader may wait for the RSI to exceed 80
before selling, as this is considered an even
stronger overbought signal. By the same logic,
the opposite is true when the RSI is low - an
RSI below 30 indicates an oversold market
and gives a potential buy signal, while an RSI
below 20 gives an even stronger buy signal.
indicator that measures the strength of all
upward movements against the strength of all
downward movements, and identifies turning
points by indicating overbought and oversold
levels. In trending markets, it can detect
momentum change; while in ranging markets,
it can spot overbought or oversold conditions.
The RSI gives a reading between 0 and 100.
If it is greater than 50, the upward force is
stronger than the downward force, and if it is
below 50, the downward force exceeds the
upward force. For us to derive any signal from
the RSI though, we normally look for readings
greater than 70 or 80, or below 30 or 20. An
RSI above 70 indicates that the instrument we
are looking at is overbought, pointing to a
potential sell opportunity. A more conservative
trader may wait for the RSI to exceed 80
before selling, as this is considered an even
stronger overbought signal. By the same logic,
the opposite is true when the RSI is low - an
RSI below 30 indicates an oversold market
and gives a potential buy signal, while an RSI
below 20 gives an even stronger buy signal.