RSI

Also known as: Relative Strength Index (RSI), Relative Strength Index, RSI (Relative Strength Index), RSI 14, RSI Indicator

The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and magnitude of price changes on a 0–100 scale. Developed by J. Welles Wilder, it is most commonly used with a 14-period setting, flagging overbought conditions above 70 and oversold conditions below 30.

On this page you'll find every RSI-based strategy decoded on Strategy Decoder — from simple mean-reversion dips to divergence setups and trend-filtered momentum entries. Each strategy card links to the full breakdown: exact entry and exit rules, stop-loss placement, targets, and the generated Pine Script you can load straight into TradingView for backtesting.

Common RSI approaches you'll see here: buying oversold pullbacks inside an uptrend, fading overbought extremes in ranges, RSI divergence at swing points, and RSI(50) crosses as a momentum filter combined with moving averages.

Frequently asked questions

What is the primary purpose of the RSI indicator?

The Relative Strength Index (RSI) is used to evaluate momentum and identify whether an asset is overbought or oversold. It helps traders determine the strength of a price trend and spot potential reversal points. By measuring the speed of price changes over a set period (usually 14 bars), it provides a mathematical basis for timing entries and exits, ensuring traders don't buy at the peak of a rally or sell at the bottom of a crash.

How do you trade RSI divergence?

RSI divergence occurs when price action and the momentum oscillator move in opposite directions. Bullish divergence is spotted when price hits a lower low but the RSI makes a higher low; this suggests selling pressure is fading. Bearish divergence happens when price reaches a higher high while the RSI makes a lower high, indicating a lack of buying conviction. These scenarios are highly valued by traders as they often precede significant trend reversals before they are obvious on a price chart.

Which timeframes and markets are best for RSI?

The RSI is a universal tool effective across all liquid markets, including equities, commodities, and cryptocurrencies. While it is highly popular for day trading on 5-minute or 15-minute charts to catch intraday swings, it is statistically more reliable on daily or weekly timeframes where it filters out market noise. In sideways or ranging markets, the RSI is exceptionally accurate at marking top and bottom boundaries, though it requires more caution during parabolic trending phases.

Strategies using this indicator (141)