RSI (Relative Strength Index)
The RSI is a 0 to 100 oscillator that measures the strength of recent gains against recent losses, usually over 14 periods.
Created by J. Welles Wilder in 1978, the RSI compares average gains with average losses over a period, often 14 candles. Above 70, the market is said to be overbought; below 30, oversold.
A common mistake: selling as soon as the RSI goes above 70. In a strong uptrend, it can stay there for days while price keeps climbing. In a trend, the 40–50 zone works better as a pullback area for buys.
The RSI is most useful for spotting divergences, when price makes a new high that the indicator fails to confirm, and for judging a move's momentum.