📊 Relative Strength Index (RSI) A simple market reading
Have you heard about the RSI indicator and want to understand it quickly? Follow this simplified explanation to learn how to read it and use it with candlesticks 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 do you read it practically? 🔍
1. Open the time frame (Hourly, 4-Hour, Daily).
2. Set RSI to the default setting (14 periods).
3. Watch if the indicator line crosses above 70 or drops below 30.
4. Combine RSI with candlestick patterns 🕯️
Example:
We found a Hammer candle at a support level, and RSI showed under 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 candlestick patterns or moving averages.
Set a stop loss: below the point where the green light appeared.
Try it on a demo account before using it with a real balance.
✨ Try these steps and share with us:
Where did you last see RSI close to 30 or 70?