Relative Strength Index (RSI) is a momentum indicator that calculates average price gains and losses over a given period of time (its default value is 14 periods). The RSI value, displayed on a scale from 0 to 100 as an oscillating line, gives out potential buy and sell signals the closer it gets to the extremes (0 or 100).
RSI - Relative Strength Index
When the RSI oscillator enters the Oversold area you should consider buying.
When the RSI oscillator enters the Overbought area you should consider selling.

Important : You need to take into consideration more factors when deciding if to buy/sell, not just the oversold/overbought RSI areas. In strong trends, the RSI oscillator might not even enter the oversold/overbought areas for prolonged periods of time, so keep that in mind when making decisions.

Some traders assign different values to the oversold/overbought areas to better fit their trading strategies. I am trading using an oversold area from 0 to 20 and an overbought area from 80 to 100.