Indicators

RSI (Relative Strength Index)

How your agent spots exhaustion in the market

RSI measures how fast price is moving up vs. down on a scale of 0 to 100. It tells your agent whether an asset — crypto, forex, stocks, or commodities — has been bought too aggressively (overbought) or sold too hard (oversold), and when a reversal might be coming.

What RSI Tells Your Agent

RSI boils down all recent price action into a single number:

  • Below 30 — Oversold. Sellers are exhausted. A bounce may be coming.
  • Above 70 — Overbought. Buyers are exhausted. A pullback may be coming.
  • Between 30-70 — Neutral. No extreme reading.

But your agent doesn't just look at one number. It reads the momentum context too — is RSI trending up from oversold? Is it rolling over from overbought? Is there a divergence between price and RSI? The AI interprets all of this.

How Your Agent Calls RSI

When your agent runs its analysis, it calls RSI as a tool. Here's what that looks like under the hood:

The agent sends:

  • Timeframe — Which chart to analyze (e.g. 5-minute, 1-hour, daily)
  • Period — How many candles to look back (default: 14)
  • Overbought level — Where to draw the line (default: 70)
  • Oversold level — Where to draw the line (default: 30)

The agent gets back:

  • rsi: 28 — The current RSI value
  • oversold: true — It's below the oversold threshold
  • overbought: false
  • momentum: "moderate_down" — Selling pressure exists but is easing

The agent reads these outputs alongside every other indicator it has. RSI at 28 alone might be interesting. RSI at 28 while EMA confirms an uptrend and MACD is turning positive? That's a high-confidence buy.

Multi-Timeframe RSI

Your agent can call RSI on multiple timeframes in the same analysis:

  • Daily RSI at 45 — No extreme, market is neutral on the big picture
  • 1-hour RSI at 31 — Getting oversold on the medium timeframe
  • 5-minute RSI at 22 — Deeply oversold on the execution timeframe

The agent sees all three and understands: the daily trend isn't overextended, but the short-term is washed out. If the strategy says "buy short-term oversold dips in a neutral-to-bullish daily trend," this is exactly the setup it's looking for.

What RSI Is Good For

Mean reversion — RSI shines when markets are choppy or range-bound. An asset that drops to RSI 25 in a range tends to bounce back. Your agent can catch these snaps automatically.

Trend filter — In a strong uptrend, RSI rarely dips below 40. If your strategy says "buy pullbacks when RSI dips to 35-40 in an uptrend," RSI becomes a precise timing tool.

Divergence — When price makes a new low but RSI makes a higher low, selling pressure is fading even though price is still dropping. Your agent can detect this and position early for a reversal.

What RSI Isn't Good For

RSI can stay overbought or oversold for extended periods during strong trends. In a raging bull market, RSI might sit above 70 for days. Blindly selling every time RSI hits 70 in a trend will lose money. That's why pairing RSI with a trend indicator like EMA is so effective — it adds context.

Next Steps