How to Use RSI on Pluang Web Platform to Identify Overbought and Oversold Assets

The Relative Strength Index (RSI) on Pluang's web trading platform is a momentum oscillator that measures the speed and magnitude of recent price changes on a scale of 0 to 100, allowing you to assess whether an asset may be overbought or oversold relative to its recent trading history. Readings above 70 are traditionally considered overbought territory and readings below 30 are considered oversold territory.

• How RSI is calculated: RSI compares the average size of recent gains to the average size of recent losses over a set period (default is 14 periods on Pluang's web platform). A value closer to 100 means recent gains have far outpaced recent losses; a value closer to 0 means recent losses have dominated. The 14-period setting is the most widely used, but you can adjust it in Pluang's indicator panel — a shorter period makes RSI more sensitive, a longer period smooths it out.

• Reading overbought signals on Pluang: When RSI rises above 70, the asset has experienced significant upward momentum in a short time. This does not automatically mean a price drop is imminent, but it alerts you that the asset may be due for a pause or pullback. In strong trending markets, RSI can stay above 70 for extended periods.

• Reading oversold signals on Pluang: When RSI falls below 30, the asset has experienced significant downward momentum. Again, this does not mean a bounce is guaranteed — in strong downtrends, RSI can remain in oversold territory for a long time. The oversold signal is most useful when it occurs after a large, sharp move down and other conditions support a potential reversal.

• RSI divergence: Like MACD, RSI can produce divergence signals. If price is making new highs but RSI is making lower highs (bearish divergence), it may signal that the uptrend is losing momentum. Conversely, if price makes new lows but RSI makes higher lows (bullish divergence), it may indicate that selling pressure is weakening. These are considered more advanced signals on Pluang's web platform.

• Combining RSI with other tools on Pluang: RSI is most effective when used alongside other indicators available on Pluang's web platform, such as moving averages to confirm trend direction or volume data to validate the strength of a move. An oversold RSI reading in an established uptrend, for example, can be a higher-confidence setup than an oversold reading in a clear downtrend.

Related questions:

Q: Can I change the RSI period setting on Pluang's web platform?
Yes, Pluang's indicator panel lets you adjust the RSI period from the default 14 to a shorter period (more sensitive) or longer period (smoother) depending on your trading style.

Q: Does RSI above 70 always mean I should sell on Pluang?
Not necessarily — in strong uptrends, RSI can remain above 70 for extended periods. It is one signal to consider alongside other factors, not a standalone sell instruction.

Q: Is RSI available for all assets on Pluang's web trading platform?
Yes, RSI can be applied to charts for any asset class available on Pluang's web platform, including crypto, US stocks, and Indonesian stocks.