The Relative Strength Index (RSI) | An Explainer

[Mod-MattZ]

Originally published at: https://optimusfutures.com/tradeblog/archives/relative-strength-index-rsi-trading/%20

This article on Relative Strength Index / RSI Trading is the opinion of Optimus Futures. When the trajectory of a price swing is upward, typically day traders assume there’s an influx of buyers powering the asset, that is bidding up its price. Conversely, when asset prices are falling, we assume that there are more sellers than buyers; the latter demanding lower prices. In this bidding process, is there a way to measure whether prices are moving toward “overbought” or “oversold” levels before a stall or reversal takes place? That is what the Relative Strength Index (RSI) is designed to try…