Chart Decoder Series: RSI – Tools to View Markets

May 21st Chart Decoder Series: RSI – Tools to View Markets

Hello, I’ll go back to the Chart Decode series, turn dry numbers into simple signals and help you act in the right place!

In the previous article, we discovered how MACD helped us chase momentum. Today, find the most popular tools for traders to complete their market trend skills. RSI – an essential companion in all transactions.

What is RSI?

RSI (Relative Strength Index) – also known as the market psychological guidelines – is a simple but extremely powerful tool. It helps you know that the market is too excited (too buy) or depressed (too sell).

Unlike metrics that run prices, RSI measures purchase/sell pressure based on recent changes. This is like having a radar that discovers crowd psychology before the market flips!

Decode RSI in the easiest way to decode:

●RSIs above 70 = Too many → The market may be trying to cool down

●Less than RSI = 30 = Too → The market may be about to wake up

● RSI between 40-60 = Cold Status → No Hot Signals!

A simple example:

RSI (purple color board): “Too many” warning

• In the chart above, the RSI of the last 14 candles exceeded the threshold 70status signal Too classic.
• This indicates that BTC’s recent price rise may have lost momentum or are preparing to enter the adjustment phase.

Traders are currently observing:

• RSI decreases Less than 70 As the first sign of inversion.
• If BTC is still in place, the RSI can remain above purchase. This is a common feature of a strong increase trend (but at higher risk for slow buyers).

The RSI becomes even stronger when combined with other indicators. Pair it with your MACD with your average dynamic line to see the signal better!

MACD: Increased dynamics remains intact

• MACD Line (Green): 4,142
• Signal Line (CAM): 3,536
• histogram: Yang, but the bar is shrinking It may be that your motivation is slower.

The MACD is still active on the comfortable green roads of Orange Street, but be aware of the histogram. If the bar starts to narrow, it may be a sign that the increased motivation is weakening.

Dynamic road movement: Is BTC too expanded?

●50-day EMA (Golden Road): 92,570

●200-day SMA (Green Road): 91,673

BTC prices trade higher than both major moving average lines, confirming a strong trend of growth.

However, this also causes problems. Is the market tight?

If the price is far from these roads, one batch Healthy adjustments In the area 50 EMA It’s completely possible.

Final conclusion: Should I act or wait immediately?

• Current trends: It has increased significantly, but can be expanded.
• RSI: Be careful in areas overlooking.
• MACD: Still positive, but it shows the first sign of slowing down.
• strategy:
  • If you have profits, this is a great opportunity to consider either making a profit or tightening your stop loss.
  • If you are waiting for the opportunity to enter a command, wait for the batch 50 Adjustment to EMA To get input with better risk/profit ratios.

Pro Tips for Using RSI as a Master

RSI is very simple, but the key is how you use it. Here are some tips from professional traders:

Understand the market context

RSI excels in a market where prices range between support and resistance.

However, with strong trends (such as price increases), RSI can maintain an area that is oversized/cell or more for weeks. So don’t rush to sell just because RSI touches 70 – look at the larger image.

● In combination with other indicators

RSI works best when you have friends. Make with:

○Check whether MACD motivation is a consensus with RSI.

○ Dynamic averages (e.g. 50 EMA) checks whether prices are pulled too much from the main support level.

Observe divergence

○If the price is new, RSI? In other words Reduces divergence – Motivation may be weaker.

○If the price is new, RSI? In other words Increased divergence – Bound depends on your future existence.

○Breaks don’t always happen immediately, but this is a clue that traders don’t seriously ignore.

●RSI is an early indicator, not an action call. Just because RSI signals via purchase/sales doesn’t mean you need to act immediately. Think of panic as an early warning, not a reason to buy and sell.

●Play in time frame to fine-tune your strategy

The RSI indicator changes depending on the time frame you are viewing.

○ If RSIs are too much to buy but indicate that an hour of RSI is cooled, this often indicates that the market is falling into short-term adjustments within a significant increase in trends.

○ Smart Trader uses this to wait for short-term RSI to reset before diving into a larger trend.

It appears in the chart decoding series: Bollinger Band – Professional Transaction Volatility

Always be careful. Always update.

Bitfinex. Early trading floor.

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