What is RSI?
Quick Answer
The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements in financial markets.
" RSI: The perfect tool for those who like their investing with a side of emotional turmoil, as you constantly second-guess your every move. "
BORING DEFINITION
The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements in financial markets. It ranges from 0 to 100, typically using levels of 30 and 70 to identify potential overbought or oversold conditions. Traders use RSI to evaluate the strength of a stock's recent price performance.
How Does RSI Work?
RSI calculates the magnitude of recent price changes to evaluate overbought or oversold conditions in an asset. It uses average gains and losses over a specified period, typically 14 days, to compute its value on a scale from 0 to 100. A reading above 70 suggests an asset may be overbought, while below 30 indicates it may be oversold.
Why it matters: Understanding RSI is crucial for traders who wish to assess market momentum and make informed trading decisions based on potential reversals in trend direction.
REAL WORLD EXAMPLE
> An investor noticed the RSI for Tesla had crossed above 70 and decided it might be time to sell before the stock corrected downward. After selling, they watched nervously as the stock continued to rise.
π Today's Candidates for RSI
Click a symbol for live data. Financial advice? No way.