$ETH ｜Daily RSI(14) 24.4｜Oversold
Before looking at position size, first understand RSI.
In the classic interpretation, an RSI above 70 is considered overbought, while a drop below 30 is considered oversold; some people use 80 / 20 as more extreme thresholds.
During a strong uptrend, RSI can stay above 70 for a long time; during a one-way decline, it can also remain below 30 for a long time. Overbought or oversold doesn’t mean a reversal is imminent.
Don’t disrupt your original plan because of a single number, and don’t use borrowed money to test a hunch.
Before looking at position size, first understand RSI.
In the classic interpretation, an RSI above 70 is considered overbought, while a drop below 30 is considered oversold; some people use 80 / 20 as more extreme thresholds.
During a strong uptrend, RSI can stay above 70 for a long time; during a one-way decline, it can also remain below 30 for a long time. Overbought or oversold doesn’t mean a reversal is imminent.
Don’t disrupt your original plan because of a single number, and don’t use borrowed money to test a hunch.