RSI is the indicator everyone quotes and few use well. In plain English: it measures how stretched a recent move is, on a scale of 0 to 100.
Above 70 is traditionally "overbought" — the move up has been fast and may need a rest. Below 30 is "oversold" — the move down has been fast and may bounce. But "overbought" does not mean "sell": in a strong trend, RSI can sit above 70 for weeks. Treat it as a stretch gauge, not a buy/sell button.
The real edge in RSI is divergence. When price makes a new high but RSI makes a lower high, momentum is fading even as price rises — a warning. When price makes a new low but RSI makes a higher low, selling is exhausting — an early sign of a bottom. Divergence catches turns that the raw price doesn't show yet.
Check RSI on a higher time frame first (weekly beats daily for context), and only act on overbought/oversold readings that line up with the trend and a key level. RSI alone is noise; RSI plus trend plus location is a signal.
See the idea in action — see RSI across daily, weekly and monthly at a glance, with divergence flagged.
Open RSI DashboardCreate free accountIs RSI above 70 a sell signal?
Not on its own. In strong uptrends RSI stays overbought for a long time. It flags stretch, not a reversal — pair it with trend and support/resistance.
What RSI period should I use?
14 is the standard. Shorter periods (like 3) react faster for short-term timing; longer ones are smoother for trend context.
What's the most reliable RSI signal?
Divergence — price and RSI disagreeing at a new high or low. It's the earliest hint that momentum is turning.