Relative Strength Index

What is RSI Indicator and how it is used?

The technical indicator RSI (Relative Strength Index) is one of the most popular among traders. It refers to the family of oscillators and was developed by J. Welles Wilder.

RSI is an indicator that has one line and serves to determine the strength of the current trend, as well as possible points of its reversal. RSI compares the absolute value of the growth of the price for a certain period of time with the level of its fall over the same period, the result of the calculations is displayed as a curve on a chart with a range of values from 0 to 100%.

RSI parameters customization

Having developed RSI, J.Wilder recommended using the value 14 as the time period for the calculation. The period can be changed depending on the activity of the market. It should be borne in mind that in the active market the curve of the indicator graph often crosses the levels of 30 and 70%, with most of the intersections being not signals but noise. In this case, to filter out false signals, the period can be increased, for example, to 21. The time period should be shortened if the market, on the contrary, is calm and the indicator signals appear rarely, being simply inefficient. In such situations, for example, you can reduce the length of the period to 7. 9 and 25 RSI are widely distributed also.

If the market is a long time in the region of high RSI values (between 70 and 100), then it is considered overbought. If the market is a long time in the region of low RSI values (between 0 and 30), then it is considered oversold. In both situations, reversal is quite likely.

RSI Signals

Between levels 30 and 70 there is a central zone. To consider the possibility of entry-exit into transactions should not be when the indicator enters the oversold or overbought zones, but when it comes out of them. This factor is explained by the fact that in the case when the indicator enters, for example, in the overbought area, it means that there are a lot of purchases on the market, and accordingly sales will begin in the near future since all who could buy already have bought. The signal appears when the indicator pierces the level 80 from the top down - this is a signal to sell. And, on the contrary, for oversold, only in this case RSI breaks already level 20 from below upwards.

So, simple RSI signals:

  • the signal to sell is when price come out from overbought zone
  • the signal to buy is when price come out from oversold zone

Divergence

By divergence we mean two cases:

  • RSI is growing, and the price is falling or is on the same level
  • RSI is falling, and the price is rising or isn't moving

The discrepancy, in this case, is a strong reversal indicator. And although it does not occur at every turn, it is often met in especially serious turning points. The discrepancy between the RSI curve and the price movement curve with index values above 70 or below 30 is a serious signal, which should not be neglected.

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2019-12-06 03:44
Some huge long activity
2019-12-16 01:29
2019-12-17 14:06
Bitcoin to 100 k road map
2019-12-26 05:20
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2020-01-04 15:51
Bitcoin Price Will Hit $400,000 after May's Halving The $268.93 leap was an increase of 13,000 percent. Years after, in July 2016, Bitcoin had its second halving. This halving pushed the Bitcoin price from $164.01 all the way to a mouth-watering $20,074. The increase, this time, was 12,000 percent. As the Bitcoin halving is expected in May, the king coin’s price has been predicted to hit $400,000 after the event. These forecasts are based on the history of BTC halvings. When there’s a shortage in the supply of anything, its value usually increases. This is the best way to explain why Bitcoin’s price always skyrockets after a halving. But is $400,000 possible or is it just a bullish pipedream?
2020-01-23 16:33
Will Bitcoin Halving boost the price? What do you expect guys?
public poll

Bitcoin Price Will Hit $400,000 👍👍👍
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BTC will reach at least $20,000 👍👍
▫️ 0%

BTC will double in price, reaching 16k at best 👍
▫️ 0%

The price will not change, it will stay around 8-10k 🧐
▫️ 0%

The price will collapse to 5-6k or lower 🥺🤯
▫️ 0%

👥 Nobody voted so far.
2020-01-23 16:36
Here is how halving increased the price in the past.
2020-01-23 16:47
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2020-01-24 04:39
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2020-02-11 13:50
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