RSI (Relative Strength Index, ดัชนีกำลังสัมพัทธ์)
RSI is a momentum indicator that moves between 0 and 100 and is often used to spot overbought and oversold conditions in a price.
RSI stands for Relative Strength Index. It was created by J. Welles Wilder and is one of the most widely used momentum indicators. It appears as a line in a separate panel under the price chart and always moves between 0 and 100.
RSI compares the size of recent price gains with the size of recent losses over a set number of candles. The most common setting is 14 periods. If prices have mostly been rising, RSI moves higher. If prices have mostly been falling, it moves lower.
Overbought and oversold
Two levels are commonly used:
- Above 70: often called overbought. Price has risen strongly and may be due for a pause or a pullback.
- Below 30: often called oversold. Price has fallen strongly and may be due for a pause or a bounce.
Example: On a 14-candle EURUSD chart, RSI reads 75. This means recent buying has been strong. It does not mean the price must fall. It is only a signal to be careful.
Common beginner mistake
Many beginners think "overbought = sell" and "oversold = buy". In a strong trend, RSI can stay above 70 or below 30 for a long time while price keeps moving the same way. Selling only because RSI is above 70 can mean trading against a strong trend.
RSI works best as a helper, combined with trend analysis, support and resistance, and a Stop Loss. It is not a guarantee of what price will do next.