How to Use RSI in Forex

The Relative Strength Index (RSI) was developed by Wells Wilder and first introduced in his 1978 book New Concepts in Technical Trading Systems. The Relative Strength Index is an oscillator type indicator that moves up and down on the Relative Strength Index in response to a change in market rates.

Widely hailed as one of the most accurate indicators for evaluating current market trend strength, the Relative Strength Index defines two thresholds:

  1. A reading of 30 or under is considered "oversold" and identifies a potential rate increase.

  2. A reading of 70 or higher is considered "overbought" and identifies a potential rate decrease.



Relative Strength Index on a Minimum Maximum Price Chart
Relative Strength Index placed on a Minimum / Maximum Price Chart

This is for general information purposes only - Examples shown are for illustrative purposes and may not reflect current prices from OANDA. It is not investment advice or an inducement to trade. Past history is not an indication of future performance.

Trading FX and/or CFDs on margin is high risk and not suitable for everyone. Losses can exceed investment.