The Relative Strength Index (RSI) is a momentum oscillator used in technical analysis to measure the speed and change of price movements. Typically, it operates on a scale of 0 to 100, with readings above 70 indicating an overbought condition and readings below 30 suggesting an oversold condition. Traders often use RSI to identify potential reversal points in market trends. The RSI is calculated based on the average gains and losses over a specified period, usually 14 periods. By evaluating price momentum and trend strength, it serves to help traders make more informed decisions about entry and exit points.
Technical Analysis