RSI Metals Indicator Overbought and Oversold Levels

RSI technical indicator values of above 70 are considered to be over bought: metals traders consider points above the 70 level as market tops & good points for taking profits.

RSI technical indicator values of below 30 are considered to be over sold: metals traders consider points below the 30 level as market bottoms & good points for taking profits.

These overbought and oversold metals trading levels should be confirmed by RSI center line crossovers trading signals. If these regions give a market top or bottom, this metals signal should be confirmed with RSI center line crossover metals signal. This is because these overbought and oversold levels are prone to giving whipsaws in the metals trading market.

In the metal trading example illustrated and explained below, when the RSI hit 70, it showed that the metals trading was overbought, & this could be considered a trading signal that the metals trend could reverse.

The metals chart then reversed the metals trend after a short while & started to move downwards, until it got to the oversold levels. This was considered a metals market bottom after which the metals chart started to move upwards again.

Overbought and Oversold Levels - RSI Metals Trading Strategies

Over Extended Overbought and Oversold Levels

When the metal market is trending strongly upwards or downwards the RSI 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 metals market tops and metals market bottoms because the RSI 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 metals trading whipsaws and it is best to confirm these metal signals using RSI center-line cross-over strategy.

Over Extended Overbought and Oversold Levels - RSI Metals Technical Indicator Strategy