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What Is RSI?

The Relative Strength Index measures how fast and how far price has moved recently — a 0-100 scale used here to avoid buying into an already-exhausted move.

RSI (Relative Strength Index) compares the size of recent gains to recent losses over a set window (14 periods here) and expresses it as a number from 0 to 100. High RSI (typically above 65-70) suggests a lot of recent buying pressure — potentially "overbought." Low RSI (below 30-35) suggests heavy recent selling — potentially "oversold." It doesn't predict direction on its own; it measures exhaustion.

A real filter in action — no trade taken, on purpose
SymbolGBPUSDm
RSI reading32.4
Filter triggeredOversold Exhaustion Filter (RSI < 35)
Action takenHOLD — no trade

The strategy was leaning bearish on GBPUSDm at this moment, but RSI at 32.4 was already deep into oversold territory — selling into that is exactly the kind of exhausted-move entry the filter exists to avoid.

This account uses RSI as a filter, not a trigger. A bullish trend alignment (EMA 50 above EMA 200) only converts into an actual BUY if RSI is in a healthy 40-65 range — not already overbought. If RSI has gone extreme in the direction the strategy would trade, the system holds instead, specifically to avoid entering right as a move runs out of steam.