Relative Strength Index
A momentum indicator used to spot overbought and oversold conditions.
The RSI measures how fast and how much price has been moving recently, outputting a value between 0 and 100. High values suggest the market may be overbought (due for a pullback). Low values suggest it may be oversold (due for a bounce). It's one of the most popular momentum indicators in trading.
Why It Matters
RSI helps you avoid buying at the top or selling at the bottom. It quantifies whether recent price movement has been unusually strong in one direction, which often precedes a reversal or pause. It's also useful for confirming trend strength.
Settings Explained
Direction — Bullish (looking for oversold bounces), bearish (looking for overbought reversals), or both.
Period — Number of candles for the RSI calculation. The standard is 14. Lower periods (7-9) make it more sensitive. Higher periods (21+) make it smoother.
Overbought Level — The threshold above which the market is considered overbought. Standard is 70. Some traders use 80 for stronger signals.
Oversold Level — The threshold below which the market is considered oversold. Standard is 30. Some traders use 20 for stronger signals.
Look Back Mode — How far back the RSI is calculated.
Output
RSI Value — A number between 0 and 100. Use it in Threshold or Compare Values blocks to trigger actions at specific levels.
Example Use Case
You build a mean-reversion strategy that buys when RSI drops below 30 (oversold) and sells when RSI rises above 70 (overbought). This works well in ranging markets where price tends to bounce between levels.
RSI works differently in trending vs. ranging markets. In a strong uptrend, RSI can stay above 70 for extended periods — that's not necessarily a sell signal, it's just confirmation of strong momentum. Consider adding a trend filter.
Don't use RSI alone. It's a powerful tool, but overbought doesn't mean 'sell immediately' and oversold doesn't mean 'buy immediately.' Always combine with other confirmation signals.