Relative Strength index (RSI) Technical Analysis Indicator

Learn how the RSI momentum indicator uses the closing prices of a recent period, often 14 days, to reveal current and historical price strength and momentum. Identify key levels, including neutral 50, standard 70/30, and extreme 80/20 or 90/10, to gauge trend direction and the velocity of price movement.

Explore RSI divergence as a reversal signal: bullish divergence when RSI forms higher lows while price falls, bearish divergence when price climbs but RSI declines; watch overbought and oversold levels.

Explore a Netflix case study on RSI and parabolic SAR signals, interpreting green and red candles, breaks of prior lows, and stop-loss rules to time buys and sells.

In the NFLX case study part 2, learn to use the relative strength index and parabolic SAR to spot weak and strong buy signals, manage risk, and time exits.

Case study demonstrates using the RSI and parabolic SAR to time buys and exits, manage risk with stop losses, and achieve net profit despite losses.

Apply a trend-based approach by checking uptrends versus downtrends, assess how green and red candles interact, and follow the plan using the last completed monthly candle and a demo account.