The Relative Strength Index (RSI) is one of the most common oscillators in technical analysis, and its key lies in its application scenarios.
In ranging consolidating markets, RSI is especially useful—it can help you identify support and resistance levels. But what if the market is in a strong trend? At this point, breaking above 70 on the RSI doesn't necessarily mean much. Many beginners fall into this trap: thinking that 70 is the top, only to find the trend continuing to soar.
Therefore, the core trick to using RSI is: first, determine the market type. Use it to find support and resistance in consolidating markets, but in trending markets, it must be combined with other indicators. Mixing up these two methods can be dangerous.
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How to use the RSI indicator to make money?
The Relative Strength Index (RSI) is one of the most common oscillators in technical analysis, and its key lies in its application scenarios.
In ranging consolidating markets, RSI is especially useful—it can help you identify support and resistance levels. But what if the market is in a strong trend? At this point, breaking above 70 on the RSI doesn't necessarily mean much. Many beginners fall into this trap: thinking that 70 is the top, only to find the trend continuing to soar.
Therefore, the core trick to using RSI is: first, determine the market type. Use it to find support and resistance in consolidating markets, but in trending markets, it must be combined with other indicators. Mixing up these two methods can be dangerous.