RSI (Relative Strength Index)

RSI is typically calculated over a lookback period (commonly 14 candles). Readings well above 50 mean buying pressure has been outweighing selling pressure over that window; readings well below 50 mean the opposite; readings hovering around 50 mean the two sides are roughly balanced.

As an illustration of the mechanism (not a live signal): if an asset closes higher on 9 of the last 14 candles with the average size of those gains larger than the average size of the losing candles, RSI sits well above 50 for that window, reflecting buyers outweighing sellers over that specific stretch.

A common mistake is treating 'RSI above 70' as an automatic sell signal. The trading knowledge base frames RSI as a measure of which side currently has more force behind it, not a countdown to a reversal — strong trends can hold RSI in extreme territory for a long stretch without turning.