RSI stands for “Relative Strength Index” and is a widely used momentum oscillator. To read the details of how it’s computed and see some chart examples, we recommend this article.
Short summary
RSI values range from 0 to 100 and measure the price movements down (selling) vs the price movements up (buying). Low RSI values are called “oversold” (for example RSI below 30) and can present opportunities to buy. High RSI values are called “overbought” (RSI above 70) and present opportunities to sell.
RSI in WolfBot
WolfBot uses the RSI indicator in many strategies, mostly in strategies with smaller candle sizes of 5 – 20min to find the right moment to enter the market. The buy signal previously comes from another strategy with a bigger candle sizes (looking at the bigger picture, such as hourly candles).
Additionally WolfBot uses RSI to find the right moment to exit the market when executing take profit and stop-loss trades.