Just saw: $WLD has a daily RSI of 24.8, in oversold territory.
People often ask how to read RSI. This is how I understand it.
RSI is calculated using closing prices only; it doesn't include trading volume, and it also doesn't reflect the wicks that form during a candle.
When RSI enters overbought or oversold territory, a safer approach is to first consider the overall trend, recent price levels, and whether your position can withstand a move in the opposite direction.
Sizing your position based on the stop-loss distance is far more reliable than placing trades on a whim.
People often ask how to read RSI. This is how I understand it.
RSI is calculated using closing prices only; it doesn't include trading volume, and it also doesn't reflect the wicks that form during a candle.
When RSI enters overbought or oversold territory, a safer approach is to first consider the overall trend, recent price levels, and whether your position can withstand a move in the opposite direction.
Sizing your position based on the stop-loss distance is far more reliable than placing trades on a whim.