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What Is the RSI and How Do You Read It?

The RSI (Relative Strength Index) measures the speed and size of recent price moves on a 0 to 100 scale, flagging overbought and oversold conditions. Here is how to read it and its limits. Educational, not financial advice.

By Suresh Ganapathy · September 27, 2026

The RSI (Relative Strength Index) is a momentum indicator that measures the speed and size of recent price changes on a scale of 0 to 100. Readings above 70 are traditionally called "overbought" and below 30 "oversold" — but those are conditions to note, not automatic buy or sell decisions. Educational, not financial advice.

Reading the RSI scale

RSI readingTraditional label
Above 70Overbought (momentum stretched up)
30 to 70Neutral range
Below 30Oversold (momentum stretched down)

"Overbought" means price has risen fast, not that it must fall — in a strong uptrend RSI can stay above 70 for a long time.

The most common mistake

Treating "overbought" as "sell" and "oversold" as "buy." In a trending market, momentum stays stretched, and fading it repeatedly is how traders get run over. RSI extremes are more reliable as context in a ranging market than as triggers in a trending one.

RSI divergence

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Some traders watch for divergence — price makes a new high but RSI makes a lower high (or the reverse at lows). It can hint that momentum is fading, but divergence can persist for a long time before price reacts, so it is a caution flag, not a trigger.

The honest limits

  • RSI lags — it is built from past prices.
  • It behaves differently in trends versus ranges, so the same reading means different things in different conditions.
  • It works best alongside market structure, not alone.

If you want objective, non-repainting trend markers to pair with momentum reads on TradingView, VASA Trend AI is a set of educational indicators; it does not place trades or give buy or sell advice.

Takeaway

RSI measures momentum on a 0 to 100 scale and flags overbought and oversold conditions. Read those as context, not commands — especially in trends, where momentum stays stretched — and confirm with structure.

Educational only — not financial advice. Nothing here is a recommendation to buy or sell.

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Educational content only — not financial advice. Trading involves substantial risk of loss and is not suitable for everyone.

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