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.
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 reading | Traditional label |
|---|---|
| Above 70 | Overbought (momentum stretched up) |
| 30 to 70 | Neutral range |
| Below 30 | Oversold (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.