MEDIOR · TECHNISCHE ANALYSE

RSI (Relative Strength Index)

Momentum reading, overbought/oversold myths, and divergence pitfalls.

Begrijp de RSI-oscillator, overbought/oversold niveaus en divergentie.

What RSI Measures

The Relative Strength Index (RSI) is a momentum oscillator developed by J. Welles Wilder in 1978. It measures the speed and magnitude of recent price changes to evaluate whether an asset is potentially overbought or oversold.

RSI oscillates between 0 and 100. The standard calculation uses a 14-period lookback:

RSI = 100 - (100 / (1 + RS)) RS = Average Gain over N periods / Average Loss over N periods

When gains dominate, RSI rises toward 100. When losses dominate, RSI falls toward 0. When gains and losses are balanced, RSI hovers around 50.

The Overbought/Oversold Myth

The most common (and most dangerous) RSI interpretation is:

  • "RSI above 70 = overbought = sell"
  • "RSI below 30 = oversold = buy"

This is misleading. In a strong uptrend, RSI can stay above 70 for weeks or months. Selling every time RSI hits 70 in a bull market means selling into strength repeatedly - and getting run over.

Reality: RSI above 70 in a strong trend means momentum is strong, not that a reversal is imminent. RSI below 30 in a strong downtrend means selling pressure is intense, not that a bounce is guaranteed.

RSI levels are context-dependent. In trending markets, RSI ranges shift:

  • Bull market RSI range: Often oscillates between 40-80. Pullbacks to 40-50 are buying opportunities, not sell signals.
  • Bear market RSI range: Often oscillates between 20-60. Rallies to 50-60 are selling opportunities, not buy signals.

RSI as Context, Not a Trigger

The best way to use RSI is as a contextual filter, not a standalone entry signal:

  • Confirm trend strength: RSI consistently above 50 suggests bullish momentum. Below 50 suggests bearish.
  • Identify exhaustion: RSI reaching extreme levels (85+, 15-) after a sustained move may indicate exhaustion - but only when combined with price structure signals.
  • Filter setups: "I only take long setups when RSI is above 40" is a valid filter. "I sell when RSI hits 70" is not a valid strategy.

RSI Divergence

Divergence occurs when price makes a new high/low but RSI does not confirm it:

  • Bearish divergence: Price makes a higher high, but RSI makes a lower high. Suggests momentum is weakening.
  • Bullish divergence: Price makes a lower low, but RSI makes a higher low. Suggests selling pressure is weakening.

Divergence is a warning, not a signal. It tells you momentum is fading, but it does NOT tell you when or if price will reverse.

Divergence failure: Divergence can persist for a long time. Price can make 3, 4, 5 consecutive divergent highs before finally reversing - or it might never reverse. Trading divergence alone without price confirmation is a common way to lose money in trending markets.

Practical RSI Framework

ContextRSI ReadingInterpretation
Strong uptrendRSI pulls back to 40-50Potential buying opportunity (momentum reset)
Strong uptrendRSI above 70Strong momentum - not necessarily a sell
Range-boundRSI at 70+Approaching range resistance - caution on longs
Strong downtrendRSI rallies to 50-60Potential selling opportunity (dead cat bounce)
Any contextRSI divergenceWarning only - wait for price confirmation

Practice

Exercise 1

Find a strong trending market where RSI stayed above 60 (or below 40) for an extended period. Note how many times RSI "overbought/oversold" signals would have been wrong.

Exercise 2

Find one example of RSI divergence that led to a reversal and one example where divergence failed. What was different about the price structure in each case?

Key Takeaways

  • RSI measures momentum speed, not overbought/oversold in absolute terms.
  • In trends, RSI ranges shift - don't use fixed 70/30 rules blindly.
  • Use RSI as context and filter, not as a standalone trigger.
  • Divergence is a warning, not a signal - always wait for price confirmation.
  • Pair RSI with structure and levels for meaningful analysis.

Wat is RSI?

De Relative Strength Index (RSI) is een momentum-oscillator die de snelheid en verandering van prijsbewegingen meet. De RSI beweegt tussen 0 en 100.

  • RSI > 70: Traditioneel beschouwd als overbought (overgekocht).
  • RSI < 30: Traditioneel beschouwd als oversold (oververkocht).
  • De standaardperiode is 14 kaarsen.

RSI-divergentie

Divergentie ontstaat wanneer prijs en RSI het niet eens zijn:

  • Bullish divergentie: Prijs maakt een lagere low, maar RSI maakt een hogere low → momentum verschuift naar boven.
  • Bearish divergentie: Prijs maakt een hogere high, maar RSI maakt een lagere high → momentum verzwakt.

Belangrijkste punten

  • RSI meet momentum, niet richting.
  • Overbought/oversold betekent niet automatisch omkering.
  • Divergentie is het krachtigste RSI-signaal.
  • Combineer RSI altijd met prijsstructuur en context.

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