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My MISSION here is to teach you the fundamentals.
Let’s talk about RSI - if you don’t know what’s that you are missing out big time!
Your trading routine will never be the same after this.
Let’s talk about RSI - if you don’t know what’s that you are missing out big time!
Your trading routine will never be the same after this.
The Relative Strength Index or RSI plays a key role in TA.
It's used almost by every professional trader.
RSI presents a tool for determining the degree of recent price changes to evaluate overbought and oversold conditions. It’s measured on a scale from 0 to 100.
It's used almost by every professional trader.
RSI presents a tool for determining the degree of recent price changes to evaluate overbought and oversold conditions. It’s measured on a scale from 0 to 100.
When RSI is above 70, the conditions on the market are considered overbought (this usually leads to the price falling).
When the index is below 30, the conditions are considered oversold (the price will probably go up).
When the index is below 30, the conditions are considered oversold (the price will probably go up).
There are many shifts in the market, so some traders use different values for determining the oversold and overbought conditions.
In a bull market, the 80 level is considered an overbought level, and the 20 level is considered an oversold level in a bearish market.
In a bull market, the 80 level is considered an overbought level, and the 20 level is considered an oversold level in a bearish market.
VERY IMPORTANT: Failure swings...
They appear when the RSI is under 30 or above 70.
There are 2 types of failure swings: top and bottom.
Top failure swing - peak in the RSI (over 70) fails to exceed a previous peak in an uptrend.
What follows is usually a breakdown.
They appear when the RSI is under 30 or above 70.
There are 2 types of failure swings: top and bottom.
Top failure swing - peak in the RSI (over 70) fails to exceed a previous peak in an uptrend.
What follows is usually a breakdown.
Bottom failure swing - happens when RSI is in a downtrend (below 30) and fails to set a new low and then proceeds to exceed a previous peak.
A big warning sign is when the divergence between the price line and RSI happens and the value of RSI is above 70 or below 30.
Here we can use the trendline analysis to find changes in the trend of the RSI.
Here we can use the trendline analysis to find changes in the trend of the RSI.
The breaking of the RSI trendline usually gives a signal that the price is going in the opposite direction.
Another crucial point of the Relative Strength Index is the 50 level. It frequently behaves as support during a pullback or a resistance during bounces.
Another crucial point of the Relative Strength Index is the 50 level. It frequently behaves as support during a pullback or a resistance during bounces.
How to use RSI?
1/When the RSI is below 30 (the market is oversold), traders are looking for a buy signal as they think that the market is going to bottom.
As soon as the RSI moves above the 30 level, this acts as a confirmation that a trend has turned up.
1/When the RSI is below 30 (the market is oversold), traders are looking for a buy signal as they think that the market is going to bottom.
As soon as the RSI moves above the 30 level, this acts as a confirmation that a trend has turned up.
2/When the RSI is above 70 (the market is overbought), traders look for a sell signal as they think that the market is reaching its peak.
As soon as the RSI drops below the 70 line, this acts as a confirmation that the trend has turned down.
As soon as the RSI drops below the 70 line, this acts as a confirmation that the trend has turned down.
Let me know what I should cover next. I'm also thinking about live trading sessions sometime soon.
Join my telegram - we will discuss the specifics there: https://t.me/bloodgoodBTC
Join my telegram - we will discuss the specifics there: https://t.me/bloodgoodBTC
