Market Notes｜$SOL ｜4-hour RSI(14) 24.1｜Oversold
First, the definition: “overbought” means prices have risen quickly and significantly in the recent past. It doesn’t mean there are too many buyers, nor does it mean prices are about to fall.
Next, how to read it: Many people pay more attention to when RSI moves back out of the overbought or oversold zone—for example, when it drops from above 70 to below 70—rather than taking the opposite position as soon as it enters the zone.
Calculating your position size based on where you place your stop-loss is far more reliable than just guessing.
First, the definition: “overbought” means prices have risen quickly and significantly in the recent past. It doesn’t mean there are too many buyers, nor does it mean prices are about to fall.
Next, how to read it: Many people pay more attention to when RSI moves back out of the overbought or oversold zone—for example, when it drops from above 70 to below 70—rather than taking the opposite position as soon as it enters the zone.
Calculating your position size based on where you place your stop-loss is far more reliable than just guessing.