 What is going on everybody, it's Stas here. Welcome back to another video. So in this video, we're going to be talking about how to use the RSI indicator, also known as the Relative Strength Index Indicator, to your advantage when you're investing and when you're trading in the stock market. We're also going to be going over a very brief, quick definition of what this is for all you beginners out there that are watching, because I'm sure a lot of you clicked on to this video, because you have no idea what the RSI indicator is. And I'm also going to be showing you guys some examples here on my screen. And we're also going to be showing you, I'm going to be showing you how you can set this up if you are using the think or swim platform. So in brief terms, guys, let's just hop right into it. The RSI indicator is a momentum indicator, right? And you can use this for futures, stocks, ETF indices on the overall markets, you can use this on a lot of different tradable, you know, securities, right? This is something you can use all across the board. And what it's telling us is whether or not a stock ETF future index is overbought, or if it is oversold. And typically, when a stock, let's just use stocks for examples here, if a stock is going up in price, people are buying, buying, buying, pushing that stock up on the RSI level, what we're going to be seeing is typically that stock and the level on the RSI level, it's going to be showing us that that stock is getting closer and closer to the overbought status, meaning it might not be too great of a time to hop in and buy that stock, especially if you're looking to trade it, right? And on the flip side, let's say a stock is being heavily sold, people are selling, selling, selling, pushing the stock's price down, we're going to be getting more and more oversold on the RSI level. That's pretty much in basic terms, you know, what the RSI is showing us, whether a stock is overbought, oversold, or it's somewhere in the middle, you know, roughly in this area. And now that we're talking about it, this down here is the RSI indicator, very, very simple, right? You see, this kind of looks like a stock, right? You see the trend lines here, we're going up, we're going down, we're touching the oversold area, we're going back up to the overbought area. And now we can see these two areas, right? This one bottom line here is the oversold line, which is at the 30 level, right? We can see two numbers here, one being 30, which is the oversold line, and the one on top being 70, which is the overbought line, right? And we can see the lines bouncing in and out really pretty much in between these two levels. And what you need to know about these two levels is, again, whenever a stock is getting sold, sold, sold, we're pushing down towards this 30 line, this 30 yellow line here, that means we're getting more and more oversold in that stock, opening up potentially a better opportunity to buy into that stock. And again, when we're getting bought, bought, bought, the stock's going up, up, up, we're going to be getting closer and closer to the 70 level meaning in terms of the RSI, we're going to be more overbought, making it not the best opportunity to get in in terms of the relative strength index. And of course, we see some situations here where we burst out of those levels, you know, this level in terms of this example here, the SPY, the S&P 500 ETF that I follow, we were at 85, which means we're even more overbought if we're passing that 70 threshold of the overbought side. And again, we can see some dips below the 30 threshold here, which means we're extremely, extremely oversold in terms of the relative strength index. So this is very basic, guys, very, very simple. You just got to keep an eye on these two thresholds. If we're getting closer to the top one, we're overbought. If we're getting closer to the bottom one, we are oversold. And take a look how it correlates to the price of this ETF in particular, right? We can see, you know, look at this when the RSI peeked up to the overbought side. Where was, you know, the candlesticks? Where was the chart? Where was the price of the SPY? Just take a look. We popped up very heavily. We saw a bunch of green days in a row pushing this to the overbought side, right? Remember, when people are buying, buying, buying, pushing up the price, this is getting more and more overextended, more and more overbought on the RSI. And you guys remember back in December of 2018, I sure do remember, the stock market took a massive, massive hit. And we can see that on the RSI, right? We pushed down all the way from about 280 in the SPY down to about 230 in the SPY. And take a look at where the RSI is in this level, right? We pushed all the way down to about 19, which is extremely, extremely oversold. And if we were just, you know, basing our trades, our decisions on the RSI in this time period, you know, this would have been a good time to buy in terms of what the RSI indicator is telling us. And we would have been up a nice amount on this SPY ETF, right? And just take a look at this little, little give back here or really the push back up that we saw more towards the middle of December. We sold off aggressively. Again, we can see that in the RSI. And then as we started to see some buying power pushing up the markets, we started to see the RSI back into the medium territory where it's not too overbought, but it's also not too oversold. And then when we started to get rejected by our moving average resistance here, this 50 simple moving average resistance, which is a simple moving average, that's a whole nother topic for a whole nother video, we started to see the RSI again pushing us down to the more oversold territory. So that is a quick little synopsis of what it is. And that is one example, just taking a look at the SPY. So how do you set this up on think or swim? Very basic. You come here to the studies tab, you click edit studies. And this is where you can add all of your different indicators in terms of what I use, I use again, an EMA line, two simple moving averages. I have a MACD set up. And this is what you see here. This is the RSI level. And you can set this up however you want it. I have it towards the bottom of my screen, but let's say you want to have it here, you can simply just flip it like that. And it will change it up for you, right? You can really set this up very custom based however you guys want it. And to get the RSI, let me just do it for you guys really quickly here. It's very simple. You see here studies, strategies, sets. You can set your own set here. And you know, it has custom indicators to the way you want it. Then you can just click your set however, you know, whichever indicators you want. But that's again, a whole nother topic for a whole nother video. But for the RSI, very simple. You come here, you click RSI. And where is it here guys? Where is it here? Boom. You click that. And this is it guys, pretty much it, right? RSI, you double hit it. It brings it over here to the lower tab. Again, you can, you can shift it whichever way you want wherever you want to place it on your chart. And then you click OK. And then there it is, right? And then you can just adjust the size of these so you can see them better and nice and, you know, clear and easy however you guys want to do it. And that is pretty much how you set up the RSI level on Thinkor Swim and a very just brief definition of what it is and how you can use it, right? So let's just take a look at some other stocks very, very quickly so we can get some more examples under our belt. So let's just take a look at Apple because Apple is one of the most popular stocks out there in the stock market. A lot of people like talking about Apple, right? So let's just use Apple as an example here again when we're getting overbought. The price is going up and up and up as we were here back towards the end of January into February. We went from $154 all the way up to $174. Just take a look at how oversold or rather overbought the RSI got. And from there, we took a nice little dump. And when the RSI dumps, you know, back towards this middle level and we see a support on, let's say, a previous resistance level or on a moving average indicator and the RSI is showing us being at a pretty good level here, this could indicate a good time to hop into a stock, right? And we can see, you know, if you were to buy here and hold it throughout a couple of weeks, this was a pretty good time to buy based on the RSI and especially because we were holding old resistances as new supports. And again, we can see from the dump at $175 down to about $169, that brought the RSI level down from about $62 all the way to $26, which again is extremely, extremely oversold. And from there, we ended up bouncing on an old resistance as a new support again and the 180SMA support here. And we started to climb back up very heavily. And this was recently, and we saw that the RSI yet again got very, very overbought. And what did we see yesterday, guys? I know you guys saw this. This was either two or three days before I'm recording this video. Apple stock was at $95 or $195 rather, very overbought. And we saw a nice little retracement down to about $185 on this old resistance as a new support. And that brought down the RSI level. We're holding the 50SMA as a support right now. So this, the RSI right now is showing how Apple could be at a pretty good buying point, especially since it is holding on other support levels here like the 50 moving average and an old resistance as a new support. And one thing I want to tell you guys in this video, don't just rely on one indicator to make your decisions. Did you just see how I was saying how the RSI is oversold here? But we're also maintaining levels of support. That's me relying on two or three different indicators to make my decisions. Don't always just say or think, rather, just because a stock is oversold, that is a good time to buy no matter what. That is not the way to do it. But you got to use indicators with other indicators with some fundamental analysis with some other analysis to make your decisions. Don't just base them on one indicator because that's just not how it's going to work well for you. Because there's many times when, let's say, for example, NEO stock, this is one that I know is extremely oversold right now, but it doesn't seem like it's a good time to buy in terms of other indicators. We're still getting rejected by the 50 Simple Moving Average here. We're still downtrending, getting rejected by the EMA. Although the RSI is showing how it's very, very oversold, this might not be the best time to get in due to it being still on a downward trending pattern, still being like a falling knife pattern here, making it a little bit tricky, a little bit risky to get in here. But let's say we started to break out of this resistance, we started to make higher lows, we started to use hold the 50 Simple Moving Average as a support rather than a resistance, and the RSI started to come up a bit. That's me using multiple indicators to make my decision to hop into the trade, and that might be a better time to get in. The moral of the story is don't just use one indicator, use a couple of indicators in unison to make your decisions, right? So the RSI, very brief recap, shows you whether or not a stock is overbought or oversold. It's a momentum indicator telling you, okay, if a stock's overbought, this might not be the best time to hop in, maybe you should consider selling or taking your profits. But let's say a stock is oversold, this might mean that, okay, this might be a good time to consider taking a position, maybe starting to trade a stock. So that's pretty much it for this video, guys. I really hope you did enjoy it. What is a relative strength index? I hope you guys did get some value out of this. If you did, feel free to hit that like button to support the channel. Drop a comment. Let me know what you guys think about this. If you have any video suggestions, drop them down below in the comment section. Subscribe to the channel if you're new. I do make videos every single day on stocks I'm trading, stock market updates, stuff like that, stock news. If you're interested, again, subscribe to the channel. I also have two links down below, 100% free Discord group chat and a 100% free Facebook group. Get into those if you are interested as well. And thank you all for watching. I appreciate you taking your time to watch this video. I'll see you all in the next video.