Relative Strength Index (RSI)
The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. It fluctuates between 0 and 100.
Dynamic Chart Demo
* This chart uses synthetic data to demonstrate the indicator's behavior in typical market conditions.
Core Usage
Advantages
- Clearly identifies overextended market states
- Divergence signals are powerful reversal warnings
- Versatile across all timeframes
Limitations
- Can stay overbought/oversold for long periods in strong trends
- Produces premature counter-trend signals in trending markets
- Usually requires confirmation from other indicators
Calculation Logic
Understanding the mathematical logic behind indicators helps you interpret signals more accurately and avoid misuse in unsuitable market environments.
Common Trading Strategies
RSI Divergence
Trade when price makes a new high but RSI fails to make a new high (Bearish Divergence).
RSI 50 Level Cross
Use the 50 level as a trend filter (Bullish above 50, Bearish below).
Best For
「Identifying potential reversal points and momentum exhaustion.」
Note: Technical indicators are mathematical calculations based on historical price and volume. They should be used as part of a comprehensive trading system, not as a standalone entry signal.