Relative Strength Index (RSI) 

The Relative Strength Index (RSI) is a popular momentum oscillator used in technical analysis to help traders determine if an asset is overbought or oversold. The RSI is calculated using the average gains and losses of an asset over a specified number of periods. The RSI is a bounded oscillator that ranges from 0 to 100, with high readings indicating an overbought market and low readings indicating an oversold market. In trading, the RSI indicator is used to determine whether an asset is overbought or oversold. An asset is considered overbought when its RSI value is above 70, and oversold when its RSI value is below 30. This indicates that the asset may be due for a price correction, and traders may look to enter into positions accordingly.

RSI can also be used to identify trend changes by looking for divergences between the RSI and price action. A bullish divergence occurs when the RSI is making higher lows while the asset's price is making lower lows, indicating that the asset may be due for an upward trend reversal. A bearish divergence occurs when the RSI is making lower highs while the asset's price is making higher highs, indicating that the asset may be due for a downward trend reversal.

In addition, traders can also use RSI to confirm other technical signals, such as breakouts, trend lines, and chart patterns. RSI can also be used in combination with other indicators, such as Moving Averages, to generate stronger signals and make more informed trading decisions.

It is important to note that while the RSI can be a useful tool in technical analysis, it should not be relied on solely for making trading decisions. It is always recommended to use a combination of technical and fundamental analysis when making investment decisions.