Relative Strength Index (RSI)

What it measures

The Relative Strength Index (RSI), developed by J. Welles Wilder in 1978, compares the magnitude of recent gains to recent losses over a lookback period (default 14 bars). Values are bounded between 0 and 100.

How to read it

• RSI > 70 — overbought; the prevailing trend is mature, pullback risk rises.
• RSI < 30 — oversold; potential reversal or bounce zone.
• Bullish divergence — price prints a lower low while RSI prints a higher low: a leading reversal hint.
• Bearish divergence — price prints a higher high while RSI prints a lower high: momentum is fading.
• Centerline (50) — bull markets often hold above it; bear markets reject from it.

How Finvestopia uses RSI

Our Radar scanner ingests RSI(14) on H4 across every instrument, blends it with MACD momentum and price action, and contributes to the Composite quality score. You can see the live RSI for any symbol on its instrument page and as part of the radar tile.

Common pitfalls

• In strong trends, RSI can stay above 70 (or below 30) for many bars; treating that as an instant fade is the classic beginner mistake.
• Use RSI in confluence with structure (support/resistance, EMA200, volume) — never alone.

Practical thresholds we trust

• Mean-reversion setups: RSI < 25 in range markets, with a wick rejection candle.


• Trend continuation: RSI pulling back to ~40–45 in an uptrend (or 55–60 in a downtrend) often precedes the next leg.