#TradingTools101 Here are two essential tools that every trader should know:

1: Use of the Relative Strength Indicator (RSI)

Objective: Helps determine when an asset may be overbought or oversold.

Typical parameters: RSI over 14 periods.

How it works:

Buy signal: When the RSI drops below 30 (indicating oversold conditions) and then rises above.

Sell signal: When the RSI rises above 70 (indicating overbought conditions) and then drops below.

Example: If the RSI drops to 25 and then rises to 35, this signal could indicate a buying opportunity.

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2: Use of Moving Averages (MA)

Objective: Helps detect trends and potential areas of support or resistance.

Common parameters: Short-term moving average (50 days) and long-term moving average (200 days).

How it works:

Buy signal: When the 50-day moving average crosses above the 200-day moving average — known as a golden cross.