• RSI (relative strength index) — momentum oscillator scaled 0 to 100.
  • Standard lookback period is 14 bars.
  • Above 70 is conventionally read as overbought, below 30 as oversold.
  • Divergence between RSI and price is often used as a reversal hint.

RSI compares the magnitude of recent gains to recent losses, scaled into a 0–100 range. In practice, it’s most useful for spotting when price has moved a lot in a short window, not for predicting the next direction.

How to read RSI

The two common signals are:

  • Overbought (above 70) — recent gains dominate. In strong trends, RSI can stay above 70 for extended periods, so “overbought” is not automatically “sell”.
  • Oversold (below 30) — recent losses dominate. Same caveat applies in reverse.

Either way, RSI is a read on momentum, not on value — an extreme reading means price moved fast, not that it’s wrong.

Divergence

RSI divergence is one of the more useful signals:

  • Bearish divergence — price makes a higher high while RSI makes a lower high. Often used to anticipate a top.
  • Bullish divergence — price makes a lower low while RSI makes a higher low. Often used to anticipate a bottom.

That said, divergence can persist for many bars before the reversal happens, if it happens at all.

Practical combinations

RSI works better when filtered through trend context:

  • In an uptrend, treat oversold (below 30 or 40) as a pullback entry signal.
  • In a downtrend, treat overbought (above 60 or 70) as a pullback short signal.
  • Avoid counter-trend RSI signals in strong trending markets — the indicator can pin at an extreme for long stretches.

Risks to flag

RSI lags and produces frequent false signals in trending markets. “Overbought” can stay overbought for weeks during a strong trend. There are no guarantees — use stops, size conservatively, and don’t treat any single indicator as a complete strategy.

FTMO — Industry standard

FTMO official

The free trial lets you test everything at no cost, and the 2-Step Challenge fee is refunded with your first payout after passing (no refund if you fail). See the FTMO free trial guide.

The5%ers — for building up from a small ticket

Operating since 2016. Three plans run in parallel — the one-step Hyper Growth, the two-step High Stakes and the three-step Bootcamp — with fees from $19. The profit split climbs in steps toward 100%, but a flat 3.5% is deducted from every withdrawal. On 2026-08-01 this site re-rated The5%ers from High to Low trust (★4.6→3.3) after the firm itself acknowledged payout delays in March 2026. If you use it, keep the ticket small and confirm your first payout arrives before scaling up.

→ See The5%ers official site (referral code “HZZS4” — 0% discount as of 2026-08-19)