Overbought doesn't mean sell. Oversold doesn't mean buy. Context matters
Uptrend
Overbought = buyers in control Oversold = sellers temporarily in control
Downtrend
Overbought = buyers temporarily in control Oversold = sellers in control
Countertrend = short term relief
With trend = strength
Time frames matter
Hourly RSI oversold. Weekly RSI overbought
Who do you think wins this battle?
The distinction people confuse
Taking profit from your long position and selling into strength makes sense
Opening a fresh net short position into strength doesn’t make sense
This is what catches most traders out
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
Overbought doesn't mean sell. Oversold doesn't mean buy. Context matters
Uptrend
Overbought = buyers in control
Oversold = sellers temporarily in control
Downtrend
Overbought = buyers temporarily in control
Oversold = sellers in control
Countertrend = short term relief
With trend = strength
Time frames matter
Hourly RSI oversold. Weekly RSI overbought
Who do you think wins this battle?
The distinction people confuse
Taking profit from your long position and selling into strength makes sense
Opening a fresh net short position into strength doesn’t make sense
This is what catches most traders out