Know what the period means

RSI compares recent gains and losses on a scale from zero to 100. Fourteen periods is a common setting, but fourteen hourly bars and fourteen daily bars describe very different time spans.

Extremes can persist

Levels of 70 and 30 are common reference points. Strong trends can keep RSI elevated or depressed. A high reading does not require the next price move to be down.

Check interpretation over time

Record price swings and corresponding RSI swings using consistent settings. Divergence describes a mismatch; it does not confirm reversal. Changing parameters after seeing the outcome can make interpretation misleading.

Build an observation log

Choose completed historical bars and record when RSI crosses a threshold and how long it remains beyond it. Keep cases without reversals. That makes it possible to examine whether an assumed immediate reversal is supported by observations rather than by selectively remembered charts.

Source and reading notes

This is an independently written educational overview based on the ATFX reading linked below. Examples are illustrative, not live quotes or forecasts. It does not reproduce the original article or imply endorsement by its author.