Let’s talk about how to interpret the result using both RSI and L/S Rate indicators.
Interpreting the result using RSI
- If the RSI Index indicates that the asset is in an overbought area (above 70), this may indicate that the price is too high and could decrease soon.
- If the RSI Index indicates that the asset is in an oversold area (below 30), this may indicate that the price is too low and could rise soon.
Interpreting the result using L/S Rate
- If the L/S Rate is high (like 2.37), this means that the number of long trades is greater than the number of short trades, which may indicate that the market expects a price increase.
- If the L/S Rate is low, this means that the number of short trades is greater than the number of long trades, which may indicate that the market expects a price decrease.
Interpreting the result using both indicators
- If the RSI Index indicates that the asset is in an overbought area and the L/S Rate is high, this may indicate that the market expects a price increase, but the price may be too high and could decrease soon.
- If the RSI Index indicates that the asset is in an oversold area and the L/S Rate is low, this may indicate that the market expects a price decrease, but the price may be too low and could rise soon.
Example
- If the L/S Rate is 2.37 and the RSI Index is 60, this may indicate that the market expects a price increase, but the price is not too high.
- In this case, it may be possible for the price to rise further, but it should be noted that the RSI Index may soon reach the overbought area.