RSI Gold Trading Indicator Overbought and Oversold Levels
RSI gold trading indicator values of above 70 are considered to be overbought; gold traders consider points above the 70 level as market tops and good points for taking profits.
RSI gold trading indicator values of below 30 are considered to be oversold; gold traders consider points below the 30 level as market bottoms and good points for taking profits.
These overbought and oversold gold trading levels should be confirmed by RSI center line crossovers gold trading signals. If these regions give a market top or bottom, this gold trading signal should be confirmed with RSI center line crossover gold trading signal. This is because these overbought and oversold levels are prone to giving whipsaws in the gold trading market.
In the gold trading example illustrated below, when the RSI hit 70, it showed that the gold trading was overbought, and this could be considered a trading signal that the gold trading trend could reverse.
The gold trading chart then reversed the gold trading trend after a short while and started to move downwards, until it got to the oversold levels. This was considered a gold trading market bottom after which the gold trading chart started to move upwards again.
Overbought and Oversold Levels - RSI Gold Trading Strategies
Over Extended Overbought and Oversold Levels
When the gold trading market is trending strongly upwards or downwards the RSI gold trading indicator will stay at these overbought and oversold levels for a long time. When this happens these overbought and oversold regions cannot be used as gold trading market tops and gold trading market bottoms because the RSI gold trading indicator will stay at these levels for an extended period of time. This is the reason why we say that the overbought and oversold regions are prone to gold trading whipsaws and it is best to confirm these gold trading signals using RSI center-line crossover strategy.
Over Extended Overbought and Oversold Levels - RSI Gold Trading Indicator Strategy