What RSI does and doesn't tell you

The relative strength index (RSI) measures how fast price has moved over recent candles, usually the last 14, on a scale from 0 to 100.

• Above 70 is often called overbought.
• Below 30 is often called oversold.

The big misunderstanding

Overbought doesn't mean "about to fall". It means price has risen quickly. In a strong uptrend, RSI can stay above 70 for a long time while price keeps climbing. Selling just because RSI is high is one of the most common beginner mistakes.

What a high RSI does suggest is that the move is stretched. Stretched moves often pause or pull back before carrying on. Buying at that moment means you may sit through a dip first, and a tight stop may not survive it.

How the checker uses it

The checker only counts RSI against you when it's stretched in the direction you're trading: 70 or above on a buy, 30 or below on a sell. It's a small penalty, because RSI is a warning about timing, not about direction.

A better habit

If RSI is stretched in your direction, consider waiting for a pullback, or entering with a limit order closer to support.

Key points

• RSI measures speed, not direction.
• Stretched moves often pause before continuing.
• Use it to time entries, not to bet against trends.