Hello Traders! 👋

Today, we're deciphering an essential tool for analyzing the markets: the RSI (Relative Strength Index). Whether you're trading stocks, forex, or cryptocurrencies, understanding the RSI can make the difference between a successful position and a risky trade.

🔍 What is RSI?

The RSI is a technical indicator that measures the speed and amplitude of price movements. It assesses whether an asset is overbought (too expensive) or oversold (too low), which can anticipate trend reversals.

📌 In summary:

- Scale from 0 to 100.

- > 70 = Overbought (risk of correction).

- < 30 = Oversold (potential rebound).

🎯 How to use it in Trading?

1ïžâƒŁ Basic Strategy: Overbought/Oversold

- Buy: RSI leaves the oversold zone (<30) and rises.

- Sale: RSI leaves the overbought zone (>70) and falls back.

⚠Attention: In a strong trend (e.g. Bitcoin in bull run), the RSI can remain >70 for a long time without correcting.

2ïžâƒŁ Divergences: A powerful signal

- Bullish divergence: Price makes a LOWER, but the RSI rises → Buying potential.

- Bearish divergence: Price makes a HIGHER, but the RSI falls → Potential sell.

3ïžâƒŁ Winning combination: RSI + Other tools

- With a moving average (MM50/MM200) to confirm the trend.

- With support/resistance levels to validate entry zones.

⚠ Pitfalls to Avoid

- False signals in the market range (the RSI can oscillate without a clear trend).

- Ignore the overall trend (systematically sell at RSI >70 in bull market = error).

✅ Solution: Use RSI in **conjunction with other indicators** (MACD, volumes, Price Action).

💡 The Pro Council

When day trading, test a short RSI (period 9) for more responsiveness.

In swing trading, favor RSI 14 or 25 to avoid noise.

📈 Concrete example

👉 Scenario:

- A stock falls sharply, RSI goes below 30.

- Price stabilizes, RSI rises above 30 → Buy signal.

- Target: RSI approaches 70 → Partial profit taking.

🔎 To go further:

- Backtest the RSI on your favorite assets.

- Compare it with other indicators to refine your entries.

$BTC

❓ And you?

- Are you already using RSI?

- Which strategy was most successful for you?

👇 Share your experiences in the comments! We all learn together. 💡

🚀 Like ➕ Share if helpful** to help the community!

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