In the world of investing, technical analysis acts like a navigation system — and RSI (Relative Strength Index) is one of the most powerful tools to guide your entries and exits 📍
🧠 What is RSI?
RSI (Relative Strength Index) was developed by J. Welles Wilder.
It is a momentum oscillator that measures the speed and change of price movements, ranging between 0 and 100.
🧾 The Core Idea of RSI:
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RSI > 70: Overbought zone, price may soon correct 📉
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RSI < 30: Oversold zone, price may bounce back 📈
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RSI around 50: Neutral, market in balance 👀
🔍 How to Use RSI?
✅ To Spot Buy/Sell Opportunities:
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RSI below 30 → Consider potential buy signals
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RSI above 70 → Consider potential sell or take profit signals
✅ Combine with Trendlines or Support/Resistance:
Using RSI with tools like trendlines, support/resistance zones, or MACD increases accuracy!
✅ Watch for Divergence:
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Price hits a new high, RSI does not → Bearish Divergence
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Price hits a new low, RSI does not → Bullish Divergence
Both could be signs of a trend reversal ⚠️
🛠 Recommended RSI Settings:
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Default: 14-period RSI
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Short-term: RSI(7)
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Long-term: RSI(21)
✍ Final Thoughts
RSI is a must-have tool for every trader or investor. It's simple, intuitive, and effective.
But remember: indicators are tools, not crystal balls — the key is combining them with your own analysis and discipline. Use it wisely, and let RSI guide your path to smarter investing 💰
