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
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