if you want to learn how to use the RSI indicator properly please continue to watch this video I'm here to break your misconception of 70 level being overbought and 30 level being oversold I'm going to show you why that is the biggest lie in day trading welcome back to the channel everybody my name is Artie and this is the moving average a show where we discuss everything day trading to keep you profitable let's not waste anybody's time get right into the charts and show you the RSI alright looking at the RSI the standard settings for it is overbought at 70 level and oversold at the 30 level so many people think that when price gets to this level right here it will continue the opposite direction vice versa when it gets here it will continue to the other direction this is true however this does not portray what the price actually does let me show you what I mean right now the RSI is extremely overbought at 76. you're getting some doji candles you think the price might reverse and what ends up happening is price continues to go up and up and up and up and up and up and up and up wiping out every single stop loss along the way price can stay overbought or oversold for a very very long time what you are looking for is a break of a trend line then and only then should you get into a trade to the opposite direction now once price breaks a trend line it will not always reverse the second option for when price fails to go in the opposite direction is an area of consolidation so what I would like you guys to do is go into your RSI settings and get rid of the upper Band Middle band and lower band remove the RSI background fill now you are left with something like this the standard moving average that they have built into the RSI will give you an indication of which way price is going the RSI is a momentum indicator showing momentum so if it's overbought the moment is to the upside as the RSI is above this yellow line it's showing a lot of bullish momentum if it is below it is showing a lot of bearish momentum use it as a momentum indicator not as a reversal indicator now this video is going to be a part of the intermediate playlist so if you haven't seen all of those videos check it out right here if you guys enjoyed this type of content nice short to the point make sure you're dropping a like on these videos and subscribe if you have not already thanks so much for watching and we'll see you in the next video