What is RSI and how to read it

The Relative Strength Index (RSI) is a momentum oscillator that measures how fast and how far price has moved recently. It's one of the first indicators most traders learn — and one of the most misused.

What RSI measures

RSI compares the size of recent gains to recent losses and expresses the result on a scale from 0 to 100. It was created by J. Welles Wilder in 1978 and is usually calculated over 14 periods (14 candles on whatever timeframe you're viewing).

A high RSI means recent candles have been dominated by gains; a low RSI means losses have dominated. Crucially, RSI is relative — it tells you about the pace of the current move, not whether price is objectively cheap or expensive.

How it's calculated

The formula is RSI = 100 − (100 / (1 + RS)), where RS is the average gain divided by the average loss over the lookback period. Wilder used a smoothed (exponential) average, so each new candle nudges the value rather than swinging it wildly. You don't need to compute it by hand — Indicore does it live — but knowing the shape of the formula explains RSI's behaviour: it saturates near 0 and 100 and spends most of its time in the middle.

Reading the levels

Above 70 — overbought. The move has been strong; a pause or pullback becomes more likely, but a strong trend can stay overbought for a long time.
Below 30 — oversold. Selling has been intense; a bounce becomes more likely, but oversold can get more oversold in a downtrend.
Around 50 — neutral. Gains and losses are roughly balanced. In an uptrend, RSI often uses 40–50 as a floor; in a downtrend, 50–60 as a ceiling.

How Indicore labels RSI. To make the number readable at a glance, we translate it into zones: < 30 Oversold, 30–45 Bearish, 45–60 Neutral, 60–70 Bullish, > 70 Overbought. You'll see these labels on every symbol page.

Divergence — RSI's most useful signal

Divergence is when price and RSI disagree, and it often precedes a turn:

Bearish divergence: price makes a higher high, but RSI makes a lower high. The rally is losing momentum.
Bullish divergence: price makes a lower low, but RSI makes a higher low. Selling is losing steam.

Common mistakes

Shorting just because RSI is above 70. In a strong trend that's a great way to fight the tape. Overbought is a warning, not a sell order.
Ignoring the timeframe. A 1-minute RSI of 80 and a daily RSI of 80 mean very different things. Always check multiple timeframes — Indicore shows six side by side.
Using RSI alone. Combine it with trend and MACD. RSI tells you about pace; MACD tells you about the direction and strength of momentum.

See RSI live

Every instrument on Indicore shows its current RSI across 1-minute to 1-day timeframes, with the zone label attached. For example, check BTC / USDT, Apple (AAPL) or EUR / USD — or browse all markets.

This guide is educational and not financial advice. Indicators describe past and current price behaviour; they do not guarantee future results.

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