Definitely not Nishant. Honestly, there is no such thing as overbought or oversold. Markets can go as high as it wants to, and as low as it wants to. which is why they say always expect a trend to go on and on.
Will only RSI signal is enough if we have only to know whether the market is overbought or oversold?
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I have shorted stocks which are close to 92 RSI (expecting it to fall) and got screwed when stock price rises further by about 0.5 to 1% with RSI just changing from 92 to 93. (ofcourse hitting my stop losses).
RSI value is calculated just with recent average gains or loss compared to previous one (14 period means 14 recent intervals). It can give a warning yes, but it does absolutely help us to enter a trade. We should stick to the trend until it reverse.
Having said this RSI have always helped me not to enter any trade unless it is very less below 20% or above 80%, this is what I follow.
Entering a trade is based of several parameters, I use RSI as one among them.
If RSI is above 80, I dont buy and below 20, I dont short. (not vice versa). Also I dont enter when RSI is in mid range.
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yes , rahul this thing i always remember but i just want to ask if the mood is neutral and market has rise or fall so much , rsi will make us little bit cautious
Hmm ok, yea each one has his own beliefs. Thats absolutely OK, Nishant! 