Learn Trading Indicators [Part 2] : Relative Strength Indicator or RSI
Relative Strength Indicator or RSI is one of the important and most used indicators by traders in any market. It helps traders by indicating the relative strength of buyers and sellers in a market. Greater the strength of buyers greater will be the chances of having Uptrend(price rise) in the market and greater the strength of sellers greater will be the chances of having Downtrend(price fall) in the market.
As shown in the below chart RSI basically consists of three major levels - 30, 50, 70 representing Over Sold, Neutral and Over Bought levels.
The RSI line crossing the Neutral level may result in Downtrend or uptrend depending on the situation. But there are very much chances that if RSI line crosses the 70 line then the market is overbought and buyers are going to stop buying and Sellers will start coming in the market. Opposite thing goes with the 30 level or Over Sold level. If RSI line crosses the 30 level then it implies that the market is oversold and sellers are most probably going to stop selling and Support from the buyers will come in.
As you can see in the figure, when the market is oversold then most probably the Uptrend or Pumping is going to start and when the market is overbought then Downtrend or Dumping is going to start. I am not implying that it will go in major downtrend or uptrend but one thing I can say for sure is Pump and Dump will happen at Over bought and Over sold levels. I will be posting about a new trick that I learned a couple of days ago using combination of RSI and other indicators. Stay Tuned!!
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Really Informative Posts ! No Wonder I'm following you !
Do you by any chance know any places, where i can find a group of dedicated Traders! I would like some good Signals! 😎
Thank you! The best way is to follow some of the good traders on twitter. They share quite a good info.
You have my Upvote for Life! Maybe you could recommend me some!
ah !!! a simple RSI indicator can play vital role to gain profits. I also developed a simple RSI EA two years ago.
Yep! When it is combined with other indicators, it becomes a very powerful tool for trading. I will be sharing the combination of RSI indicators with other indicators to show its strength.
Nice, thanks for sharing this post.
Glad, you liked it. Thanks
Thank you for the good guide https://9blz.com/rsi-indicator-explained/