-----------Every trader has their own style and art-----------
----------------You will learn some trading arts-----------
We will take three indicators:
(RSI, MA, MACD)
--------------------First: RSI----------------------
The RSI (Relative Strength Index) is one of the most famous technical indicators in trading, helping you know if the price is heavily bought (might drop) or heavily sold (might rise), by measuring the speed and strength of price movement!
------------RSI Types (6 vs 14 vs 24
-RSI(6):
- Its advantages:
Fast moving, captures short changes (ideal for day trading or scalping).
- Its drawbacks:
Gives many signals that may be misleading (a lot of noise).
-Usage:
Used in day trading
-RSI(14):
- Its advantages: the standard setting, balanced between speed and accuracy (suitable for intermediate traders).
- Its drawbacks: may be slightly delayed in signals compared to RSI(6).
- Usage:
Used in medium trading
- RSI(24):
- Its advantages: slow and smooth, focuses on long-term trends (ideal for investing or weekly trading).
- Its drawbacks: misses small opportunities in fast fluctuations.
-Usage:
Used by long-term investors
---------------
Let's get to the important point, how the (RSI) determines your buy or sell operations or how it works
There are 3 cases to operate (currency)⁉️
The RSI is calculated between 0 and 100.
1- In the case of buying (RSI > 70)
If RSI is above 70 → the market is overbought (a correction or drop may occur).
Decision-making method:
------ You can sell part or wait for a drop-----------
2- In the case of selling (RSI < 30)
If RSI is below 30 → the market is oversold (a rebound or rise may occur).
Decision-making method!
-------You can buy a small amount and wait for a rise-------
3- In the case of balance (RSI = 50)
The market is in a balanced state
---------- Important tips--------------
1. Do not rely on it alone! Always combine it with:
- Moving Averages (MA) ← to determine the overall trend.
- MACD ← to confirm momentum strength.
2. Look for divergence:
- If the price is making a new high but the RSI is making a lower high → warning of a bearish reversal.
- If the price is making a new low but the RSI is making a higher low → warning of a bullish reversal.
3. Use it in volatile markets
--------------Common mistakes----------------
- Buying just because RSI is below 30: the price might continue to drop!
- Selling just because RSI is above 70: the price might continue to rise!
- Ignoring the time frame: RSI on the daily chart ≠ RSI on the hourly chart
