KEY TAKEAWAYS
- The common levels to pay attention to when trading with the RSI are 70 and 30.
- An RSI of over 70 is considered overbought. When it below 30 it is considered oversold.
- Trading based on RSI indicators is often the starting point when considering a trade, and many traders place alerts at the 70 and 30 marks.
- When the alert is triggered, the trader will examine the validity of a trade.
- The RSI can give false signals, and it is not uncommon in volatile markets for the RSI to remain above the 70 or below the 30 mark for extended periods.
