FREE EXPLAINER · BEGINNER FOUNDATION
What Is RSI?
The Relative Strength Index measures the speed and size of recent price changes on a scale from 0 to 100.
The simple explanation
The Relative Strength Index measures the speed and size of recent price changes on a scale from 0 to 100.
Why it matters
It helps describe momentum, not whether a company is good or bad.
A simple way to think about it
Strong trends can stay overbought or oversold. Use RSI with structure, trend, divergence context and the chosen timeframe.
A common beginner mistake
Shorting simply because RSI is above 70 or buying because it is below 30.
What to check next
- Check that you understand the definition in plain English.
- Look at the company, market and timeframe rather than one number alone.
- Ask what could change the interpretation.
- Keep risk separate from excitement or certainty.
One calm takeaway
The Relative Strength Index measures the speed and size of recent price changes on a scale from 0 to 100. Use it as one piece of context, never as a promise about what happens next.