Relative Strength Index

What is the Relative Strength Index?

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RSI is one of the most popular indicators in all of trading — and for good reason. Created by J. Welles Wilder, it measures how fast and how far prices have been moving recently. The RSI produces a number between 0 and 100. When it climbs above 70, the asset is considered overbought — it may have risen too fast and could be due for a pullback. When it drops below 30, the asset is oversold — it may have fallen too far and a bounce could be coming. Think of it like a speedometer that flashes a warning when the market is running too hot or too cold.

How Does It Work?

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The bot calculates RSI by comparing recent average gains to average losses. When RSI signals oversold conditions or flips from falling to rising, the bot signals Buy. When RSI signals overbought conditions or flips from rising to falling, the bot signals Sell. RSI is particularly good at catching potential reversal points where price has moved too far too fast.

Using It in BitThor

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Select Relative Strength Index from the indicator list in your bot config. RSI is one of the most flexible indicators out there — it works as a primary signal or as a confirmation. Many traders pair it with a trend-following indicator like a Moving Average or DMI: the trend indicator keeps you on the right side of the market, while RSI helps you time your entries and exits.

Tips for Beginners

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• RSI shines at catching moments when a crypto has moved too far, too fast. It's great for spotting reversals.

• Don't rely on RSI alone during a powerful trend — in a strong uptrend, RSI can stay in overbought territory for a long time.

• Pair RSI with a trend indicator like SMA or EMA for a balanced strategy that catches both trend moves and counter-trend reversals.

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Indicator by: J. Welles Wilder | Learn more