RSI indicator (relative strength index)
Relative strength index (RSI — аббревиатура от англ. relative strength index) - is one of the indicators of technical analysis. RSI helps to determine the probability of a change in price direction, as well as the strength of the trend.
The essence of the indicator's work is that the price cannot move in the same direction indefinitely, and sooner or later there will be a trend reversal.
RSI имеет всего одну линию на временной шкале и находится ниже графика цены. Индикатор всегда движется в коридоре от 0 до 100%. Следует заметить, что значение RSI ниже 20% считается зоной перепроданности, а выше 80% — зоной перекупленности. Пространство между зонами перекупленности и перепроданности именуют центральной зоной.
Main point of use RSI indicator is that the overbought and oversold levels of the indicator work only in a sideways trend.
Divergence on RSI should be used to determine the earlier end of the trend, i.e. to close a position. It should also be taken into account that the indicator gives early signals, therefore, support and resistance lines should be used only to confirm the technical analysis of the price movement chart.