# Overbought and Oversold

*Trading & Technical Analysis — Finicade finance glossary*

Overbought and oversold describe an indicator reading at an extreme, implying a move has gone too far too fast. The words imply a judgement the data doesn't support: an overbought market is one that has been rising strongly, which in a trend is a reason to stay long rather than to sell. They are mean-reversion signals and they fail exactly when trends are strongest.

**Also known as:** overbought, oversold, extreme readings

**Related terms:** [Relative Strength Index (RSI)](https://finicade.com/glossary/rsi), [Stochastic Oscillator](https://finicade.com/glossary/stochastic-oscillator), [Mean Reversion](https://finicade.com/glossary/mean-reversion), [Bollinger Bands](https://finicade.com/glossary/bollinger-bands), [Technical Analysis](https://finicade.com/glossary/technical-analysis)

Source: https://finicade.com/glossary/overbought-and-oversold