📊 Relative Strength Index (RSI) a simple market reading
Have you heard of the RSI indicator and want to understand it quickly? Follow this simplified explanation to learn how to read it and use it with Japanese candles to enhance your trading decisions.
1. What is RSI? 🤔
Short for Relative Strength Index.
A number ranging from 0 to 100 that measures the strength and dynamics of price movement.
2. Key Levels 🧭
Above 70 → Overbought area
Below 30 → Oversold area
3. How to read it in practice? 🔍
1. Open the time frame (Hourly, 4 Hours, Daily).
2. Set the RSI to the default setting (14 periods).
3. Watch if the indicator line exceeds 70 or drops below 30.
4. Integrate RSI with Japanese Candles 🕯️
Example:
We found a Hammer candle at a support level, and the RSI was below 30.
This is a strong buy signal convergence: Reversal candle + Overbought indicator → Entry opportunity.
5. Smart Tips 💡
Don't rely on RSI alone: combine it with a candlestick pattern or moving average.
Set a stop loss: below the point where the green light appeared.
Try on a demo account before using it with real funds.
✨ Try these steps and share with us:
Where did your RSI appear close to 30 or 70 last time?