RSI: how fast has price moved?

A 0 to 100 gauge of how strongly price has been rising or falling recently.

Illustration on a made-up price series, not market data. Hypothetical, for education only.

What it measures

RSI compares the average size of recent up moves with recent down moves over a period (14 by default). A high value means price rose strongly, a low value means it fell strongly.

How to read it

Above 70 is usually called overbought and below 30 oversold. These are zones to watch, not orders to act on.
In a strong trend RSI can stay above 70 or below 30 for a long time.
Many strategies wait for the move back through a level, for example up through 30, instead of the touch itself.

A common mistake

Treating 70 as an automatic sell and 30 as an automatic buy. In a strong trend that keeps you on the wrong side for a long time.

Check yourself

1. RSI is above 70. What does that tell you? Price rose strongly recently, which is often called overbought. Price will certainly fall tomorrow. You must sell now.

2. In a strong uptrend RSI ... always stays between 30 and 70. can stay above 70 for a long time. always falls to 0.

3. Which is the more patient way to use RSI? Buy the moment it touches 30. Ignore it completely. Wait for it to move back up through 30.

Try it

In the Test tab pick the RSI Reversal template and run it on an asset you know. Then run Patient RSI on the same period and compare.

Open the app

Next lesson: Moving averages: seeing the trend through the noise →

Educational content. Not investment advice. Past or simulated results do not predict future results.