📊 DAY 4/30: MASTER THE RSI - Your Personal Traffic Light
The RSI is one of the most used oscillators by traders of all levels, and for good reason:
✅ Strengths of the RSI:
· Clear signals: Levels 70 (overbought) and 30 (oversold) well defined
· Easy interpretation: Visually intuitive
· Versatile: Works across multiple timeframes and assets
· Noise filter: Helps identify extreme moments in the market
⚠️ Limitations to consider:
· Generates premature signals in strongly trending markets
· Can remain in extreme zones for long periods
· Should not be used alone - always combine with other indicators
🎯 My recommendation for using it effectively:
1. Confirmation with trend:
· In an uptrend: look for buys when RSI > 30
· In a downtrend: look for sells when RSI < 70
2. RSI divergences:
· Bullish divergence: price makes lower lows, RSI makes higher lows
· Bearish divergence: price makes higher highs, RSI makes lower highs
3. Multiple timeframe: Check for matching signals across different timeframes
Are you currently using the RSI in your trading? In what timeframe do you usually apply it?
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