4. How to view RSI

 

 

Relative strength index (相强度指數, English: relative strength index, RSI) is an auxiliary indicator used for technical analysis of stocks, futures, and options. RSI indicates the relative strength between upward and downward pressure on prices. It was developed by J. Welles Wilder Jr. in the United States in 1978.

 

 

 

 

 

 ◆The composition of the RSI indicator?

 

 

 

The RSI indicator uses numbers and is an indicator of overbought and oversold conditions.

 

 

 

The picture above shows sections 30 and 70 with dotted lines.

 

 

A number above 70 indicated by the indicator below is interpreted as overbought, and a reading below 30 is interpreted as oversold. For example, if the stock price is going up and the RSI indicator is above 70, it is interpreted as overbought and it is not suitable to buy because it is highly likely to bite the top.

 

 

 

 

 

 

◆ Characteristics of the RSI indicator

 

 

 

If you look at the table above, there are two timings when the RSI indicator is above 70. If you look at the stock price at that time, it is a chart that bites you when you buy. In this way, RSI is often used as an indicator of risk by judging whether or not to overbought rather than buying or selling timing.

 

 

 

 

 

 

Go to RSI Practical Trading Act