Lesson 7 of 26 · Indicators · 1 min read
RSI — Relative Strength Index
beginner
A 0-100 oscillator measuring how fast and how far price has moved recently — the standard gauge for overbought/oversold conditions.
RSI compares the size of recent gains to the size of recent losses over a lookback window (14 days is the standard, and what InsiderWolf uses) and compresses that into a single number between 0 and 100. High readings mean price has been rising fast and hard relative to its own recent history; low readings mean the opposite.
The conventional read: above 70 is commonly called "overbought" (the move may be overextended), below 30 is "oversold" (the decline may be overdone). These are guidelines, not hard rules — a strong trend can hold an "overbought" RSI for a long stretch without ever reversing.
RSI measures speed, not destination — overbought can still get more overbought.
Reading an RSI value
Oversold
Neutral
Overbought
Key takeaways
- RSI is a momentum indicator, not a price-target indicator — it signals that speed/magnitude shifted, not where price will end up.
- During a strong trend, RSI can stay pinned near an extreme for a long stretch without any reversal at all — extreme readings describe strength, not just exhaustion.
- RSI feeds directly into InsiderWolf's live Momentum score, alongside EMA position and detected chart patterns.