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# 📊 Understanding RSI in Trading ### A Powerful Tool for Market Analysis ## 🔹 What is RSI? Relative Strength Index (RSI) is a momentum oscillator used in technical analysis to measure the speed and magnitude of price movements. ## 🔹 How RSI Works RSI is calculated using the formula: $$RSI = 100 - \left( \frac{100}{1 + RS} \right)$$ where RS (Relative Strength) is the ratio of average gains to average losses over a set period (typically 14 days). ## 🔹 Key RSI Levels ✅ Above 70 → Overbought (potential reversal or correction) ✅ Below 30 → Oversold (potential buying opportunity) ✅ Near 50 → Neutral (market consolidation) ## 🔹 Uses of RSI - Identifying Trend Strength – Confirms bullish or bearish momentum. - Spotting Reversals – Helps detect potential turning points in price action. - Confirming Breakouts – RSI divergence can signal trend continuation or reversal. - Enhancing Trading Strategies – Works well with moving averages, Bollinger Bands, and volume indicators. ## 🔹 Advanced RSI-Based Trading Strategy 📌 Combine RSI with EMA-20 & MA-200 📌 Set alerts for overbought/oversold conditions 📌 Use RSI divergence to confirm trend strength 📌 Analyze volume alongside RSI for stronger confirmations . $BNB $SOL $ETH