What is RSI in Stock Trading? Relative Strength Index Explained
What is RSI? RSI, or Relative Strength Index, is a popular momentum indicator that measures the speed and change of price movements. It ranges from 0 to 100 and is primarily used to identify overbought or oversold conditions in a stock.
RSI > 70: Indicates the stock may be overbought, meaning it could be due for a correction.
RSI < 30: Indicates the stock may be oversold, suggesting a potential buying opportunity.
How to Use RSI in Trading Traders look for extreme RSI values to find potential reversal points. For example, a stock with an RSI over 70 might be primed for a downward correction, while an RSI below 30 could indicate a possible upward reversal.
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