RSI – Relative Strength Index: What Most Traders Use Wrong

RSI (Relative Strength Index) is a momentum oscillator that measures speed of price movement, on a scale of 0 to 100. Most people think: 🔻 RSI < 30 = Buy 🔺 RSI > 70 = Sell But this is an oversimplification. In strong trending stocks, RSI stays overbought (above 70) for a long time and keeps making new highs. 🔹 In uptrend: RSI between 40–70 is healthy 🔹 In downtrend: RSI between 30–60 is typical ✅ Best way to use RSI? Look for bullish divergence: Price making lower low, RSI making higher low — potential reversal. Look for bearish divergence: Price making higher high, RSI making lower high — weakness coming.