19/07/2026
📊 SUNDAY LEARNING: UNDERSTANDING RSI (RELATIVE STRENGTH INDEX)
RSI is one of the most popular momentum indicators in trading. Here's what every trader should know 👇
What is RSI?
RSI measures the speed and magnitude of recent price movements on a scale of 0 to 100. It tells you whether an asset might be overbought (too expensive, could pull back) or oversold (too cheap, could bounce).
The key zones:
🔴 Above 70 = Overbought — momentum may be overheated, watch for a possible reversal or pullback
🟢 Below 30 = Oversold — momentum may be exhausted to the downside, watch for a possible bounce
⚪ Around 50 = Neutral zone — no strong momentum bias either way
How traders use it:
1️⃣ Spotting potential reversal zones
2️⃣ Confirming trend strength (RSI staying above 50 in an uptrend = healthy momentum)
3️⃣ Divergence — when price makes a new high/low but RSI doesn't confirm it, this can signal weakening momentum
Common mistake to avoid:
⚠️ RSI can stay "overbought" or "oversold" for a long time during strong trends. Don't just sell because RSI hits 70 — wait for confirmation from price action.
Pro tip: Combine RSI with support/resistance or trendlines for stronger signals — never rely on one indicator alone.
⚠️ This is educational content only, not financial advice. Always do your own research and manage your risk.
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