Level 3: Technical ToolkitInteractive
Relative Strength Index (RSI)
22 min readUpdated Mar 2026
Frequently Asked Questions
Quick Check
RSI below 30 suggests:
RSI works best as:
RSI below 30 suggests:
RSI works best as:
The RSI (Relative Strength Index) is a momentum indicator that measures speed and magnitude of price changes on a 0-100 scale. Readings above 70 suggest strong bullish momentum, below 30 suggest strong bearish momentum. RSI identifies overbought/oversold conditions and momentum divergence.
measures momentum on a 0-100 scale. Moving averages tell you where the trend is going; RSI tells you how strong the momentum is behind it, and when it might be running out of steam.
The basics: 14-period lookback. RSI near 100 = strong bullish momentum. RSI near 0 = strong bearish momentum. RSI at 50 = neutral.
The classic interpretation (sell above 70, buy below 30) often fails in strong trends.
Use the 50 level as the dividing line between bullish and bearish regimes.
RSI is an early warning that the trend is weakening internally.
Triple Confirmation
The strongest signals combine RSI divergence + candlestick reversal + known S&R level. Three independent confirmations at the same price = high-probability setup.
Caveats: Divergence is a warning, not a timing signal. Price can diverge for weeks before reversing. More reliable after extended trends; less meaningful in ranges.
Key Takeaways
Try This
Add 14-period RSI to a daily chart. Over the last 3 months: did RSI stay mostly above or below 50? Any divergences? When RSI pulled back to 40-50 in an uptrend, what happened next?
Track RSI-based entries in Swingfolio and measure which RSI levels produce your best trades.
Start Tracking FreeDisclaimer
This educational content is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Trading involves risk of loss. You should consult a qualified financial advisor before making investment decisions. Swingfolio is a trade journaling tool, not a financial advisory service.