Summary
TLDR: While Relative Strength Index (RSI) can be a useful tool in trading, it is not foolproof as markets can maintain strong upward trends for extended periods, keeping RSI above 70. Markets often follow Newton’s law of motion, staying in the same direction unless acted upon by an external force.
Key Points
1. RSI is not a foolproof indicator of market movements, as markets can maintain a strong upward trajectory for extended periods, keeping the RSI above 70.
2. It is important to consider other factors and not rely solely on RSI when making trading decisions.
3. Understanding market dynamics and trends is crucial, as markets can continue in the same direction until acted upon by a significant force.