Module 4: Technical Analysis
RSI (Relative Strength Index)
5 min read
RSI is a momentum oscillator from 0 to 100 that measures the speed of recent price changes.
Reading RSI
Readings above 70 are often called overbought and below 30 oversold, using the common 14-period setting. In strong trends RSI can stay overbought or oversold for a long time, so these readings are not automatic reversal signals.
Divergence, where price makes a new high but RSI does not, can warn that momentum is fading.
Key takeaways
- RSI measures momentum on a 0–100 scale.
- Overbought is not the same as "about to fall".
- Divergence can warn of fading momentum.
Educational content only, not financial advice. Trading forex and CFDs involves significant risk of loss.