๐ Daily Trading Lesson โ Episode 9
๐ก RSI Indicator Explained โ When to Open LONG and SHORT
๐ Iโm waiting for your likes and comments
Many traders understand RSI levels, but still ask:
When exactly should I open a LONG or a SHORT?
Here is the correct and professional way to use RSI.
๐ Golden Rule
โ Never open a position using RSI alone
โ First identify the market trend, then use RSI for confirmation
๐ข When to Open a LONG Position
Case 1: Market is in an Uptrend ๐
โ๏ธ Higher highs and higher lows
โ๏ธ Price holds above key support levels
RSI confirmation:
RSI stays above 40
RSI pulls back to 30โ40 zone and turns up again
๐ Meaning:
The correction is likely over and buyers are still in control.
โ This is a valid LONG setup
Case 2: Oversold with Confirmation
โ๏ธ RSI drops below 30
โ๏ธ RSI starts moving upward
โ๏ธ Price is near a strong support level
โ ๏ธ Be careful if the overall trend is strongly bearish.
๐ด When to Open a SHORT Position
Case 1: Market is in a Downtrend ๐
โ๏ธ Lower highs and lower lows
โ๏ธ Price is below resistance levels
RSI confirmation:
RSI stays below 60
RSI rises to 60โ70 zone and turns down
๐ Meaning:
The pullback is finished and sellers are still strong.
โ This is a valid SHORT setup
Case 2: Overbought with Confirmation
โ๏ธ RSI goes above 70
โ๏ธ RSI turns downward
โ๏ธ Price reaches a strong resistance
โ ๏ธ In strong uptrends, do not short using RSI alone.
๐ง RSI Divergence (Warning Only)
Price makes higher highs, RSI makes lower highs โ โ ๏ธ Short warning
Price makes lower lows, RSI makes higher lows โ โ ๏ธ Long warning
๐ Divergence is a warning, not an entry signal.
๐งพ Simple RSI Trading Table
Market Condition RSI Behavior Action
Uptrend RSI above 40 LONG
Uptrend pullback RSI turns up from 30โ40 LONG
Downtrend RSI below 60 SHORT
Downtrend pullback RSI turns down from 60โ70 SHORT
๐ Final Reminder
RSI does not predict direction โ it confirms strength.
Always combine RSI with trend, support/resistance, and risk management.
๐ In trading:
Confirmation is more important than prediction.
