RSI Commodity Trading Indicator Overbought & Oversold Levels

RSI technical indicator values of above 70 are considered to be over bought: commodity 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: commodity traders consider points below the 30 level as market bottoms and good points for taking profits.

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

In the commodities trading example shown below, when the RSI hit 70, it showed that the commodity trading was overbought, & this could be considered a trading signal that the trend could reverse.

The commodity chart then reversed the commodity trend after a short while and started to move downward, until it got to the oversold levels. This was considered a commodity market bottom after which the commodity chart started to move upward again.

Overbought and Oversold Levels - RSI Commodity Trading Strategies

Over Extended Overbought and Oversold Levels

When the commodities trading 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 commodity market tops and commodity 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 commodity trading whipsaws and it is best to confirm these commodities signals using RSI center-line crossover strategy.

Over Extended Overbought & Oversold Levels - RSI Commodity Technical Indicator Strategy