RSI bullish divergence occurs when:

Price makes lower lows but RSI makes higher lows. Bullish divergence = price making lower lows while RSI makes higher lows, suggesting weakening selling pressure.

In a strong uptrend, RSI above 70 means:

Momentum is strong, but watch for reversal signs. Overbought in a trend means strong momentum. Wait for actual reversal confirmation.

The standard RSI period is:

14. 14 periods is the standard RSI setting used by most traders.

Courses / Trading Fundamentals

RSI Indicator

Measuring momentum with precision

The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and magnitude of price movements on a scale from 0 to 100.

Standard settings use 14 periods. The key levels are: - Above 70: Overbought (price may be due for a pullback) - Below 30: Oversold (price may be due for a bounce) - 50 level: Acts as a trend filter (above = bullish, below = bearish)

Critical concept — RSI Divergence: - Bullish divergence: Price makes lower lows, but RSI makes higher lows → Potential reversal up - Bearish divergence: Price makes higher highs, but RSI makes lower highs → Potential reversal down

Important: Overbought does NOT mean "sell immediately." In strong trends, RSI can stay overbought for extended periods. Use overbought/oversold readings as alerts, not automatic signals.

Pro tip: RSI divergence on the 4H or Daily chart is one of the most powerful reversal signals.

Pro tip: In strong uptrends, use RSI 40-50 as an oversold zone instead of 30.

Common mistake: Selling immediately when RSI hits 70. Better: Overbought means momentum is strong — wait for confirmation before counter-trading.

Common mistake: Using RSI alone as a trading system. Better: Combine RSI with support/resistance and price action for confluence.

Key takeaways

RSI scale: 0-100, overbought > 70, oversold < 30
Divergence between price and RSI signals potential reversals
RSI can stay overbought/oversold in strong trends
50 level acts as a trend filter

Quiz

RSI bullish divergence occurs when: Answer: Price makes lower lows but RSI makes higher lows. Bullish divergence = price making lower lows while RSI makes higher lows, suggesting weakening selling pressure.
In a strong uptrend, RSI above 70 means: Answer: Momentum is strong, but watch for reversal signs. Overbought in a trend means strong momentum. Wait for actual reversal confirmation.
The standard RSI period is: Answer: 14. 14 periods is the standard RSI setting used by most traders.

Educational content, not financial advice.