The Relative Strength Index (RSI) is another essential indicator in technical analysis. It’s known as a momentum indicator, meaning that it measures the rate at which assets are bought and sold. Presented on a scale of 0 to 100, an RSI score attempts to inform investors on whether assets are overbought or oversold. Typically, an asset may be considered oversold if it has a score less than or equal to 30, and it could be overbought with a score greater or equal to 70.

If you head to New > RSI Strategy, you can see this for yourself. RSI is generally measured over periods of 14 (i.e., 14 hours or 14 days), but you’re free to tweak that setting to suit your own strategy.

Add this to the chart. You should see a few arrows displayed now (defined by the strategy.entry() function in the code). RsiLE indicates a potential opportunity to long the asset as it may be oversold. RsiSE highlights possible points at which to short the asset when it’s overbought. Note that, as with all indicators, you shouldn’t necessarily rely on these as foolproof evidence that prices will decrease/increase.