Technical Analysis for Beginners - Relative Strength Index (RSI)
The Relative Strength Index (RSI) is another simple indicator that beginners can find very useful in identifying future price movements. The RSI is a measure of momentum of price action, and by default uses the gains and losses of the 14 prior periods to plot the speed of price changes.
![RSI.jpg](https://steemitimages.com/DQmU694A5J92KELr1LuP1em2X5rTWVgFRG48hEgmLLybyGQ/RSI.jpg)
The indicator scores the current movement from 0 to 100 using the following equation:
where RS = Average Gain / Average Loss
The main way the RSI is used is to indicate when the market is either oversold (score < 30) or overbought (score > 70) as these can be great times to buy or sell into the market, when a potential reversal is imminent. A period of an asset being oversold could be a good time to buy, where a period of overbuying might be the time to sell. Be careful as a large influx of volume in a short period can provide a false reading of momentum, so the RSI is more commonly used on the 1hr chart and above.
Thanks for breaking it down. I’m a fan of using the RSI.
You're very welcome. Glad it was of some help.
Looks decent guide thanks https://9blz.com/rsi-indicator-explained/