#MarketPullback Everything 👌 Let's explain step by step how to combine RSI with support and resistance to filter out false signals:
📌 1. Identifying Support and Resistance
Support: A price area where the decline often stops and the price bounces back upwards.
Resistance: A price area where the rise often stops and the price bounces back downwards.
📌 2. Combining with RSI
Strong Buy (more guaranteed trade):
RSI less than 30 (Oversold).
Price at a strong support area.
➝ This gives us a high probability that the price will bounce back upwards.
Strong Sell (more guaranteed trade):
RSI greater than 70 (Overbought).
Price at a strong resistance area.
➝ This gives us a high probability that the price will bounce back downwards.
📌 3. Why is this combination important?
RSI alone can give false signals (the price stays above 70 or below 30 for a long time).
Support and resistance provide a strong reference level that increases the credibility of the signal.
📌 4. Practical Example
If RSI is less than 30 but the price has no nearby support ➝ you might not buy.
If RSI is above 70 and the price touched previous resistance ➝ Strong sell signal.