RSI (Relative Strength Index) explained

The RSI measures how strong recent up-moves are compared with down-moves, on a scale of 0 to 100. The default setting looks back 14 candles.

Overbought and oversold

Above 70 is called "overbought", below 30 "oversold". The common mistake is to sell every time RSI goes above 70. In a strong uptrend, RSI can stay above 70 for weeks while price keeps rising. Overbought means strong, not about to fall.

Two better ways to use RSI

1. Trend filter: in an uptrend RSI tends to stay between 40 and 80, and pullbacks to 40–50 are buying opportunities. In a downtrend it stays between 20 and 60, and rallies to 50–60 are selling opportunities.

2. Divergence: price makes a higher high but RSI makes a lower high. Momentum is fading. It is not a sell signal on its own, but at a resistance level it is a strong warning.

Add RSI from the Indicators menu on Supercharts. Its "Technicals" tab also shows the current RSI reading for every symbol.