6. RSI Trading Law

 

Among the trading methods using various auxiliary indicators, it is a trading method with high probability and easy to set the timing of buying and selling along with the moving average. Let's take a look at the 6 actual trading items prepared by remembering the 2 points of view below.

 

1. Trend is as important as RSI forward stock price.

 

2. Understand and apply the Failer Swing phenomenon.

 

 

 

 

Click here to view the RSI chart!

 

 

 

 

◆ Intuitive interpretation of RSI indicators

 

Overbought Zone (RSI 70 or higher) - This is a good time to sell as the buying trend has reached its peak.

 

 

Oversold Zone (RSI 30 or less) - This is a good time to buy as the selling trend has reached its peak.

 

 

 

 

◆ RSI 50 lines for reference only

 

Buying and breaking above the RSI 50 line are a good section to refer to as there are many tricks.

 

The 50 line acts as support and resistance, and it is advisable to refer only to the point when it breaks through a very strong upward or downward break.

 

 

 

 

◆ RSI indicator in a downtrend

 

In a downtrend, even if the RSI line crosses the 30 line, it can be viewed as a short-term sell point if the RSI line does not break through the 50 line. It is predicted that the downtrend will continue.

 

In a downtrend, it is basic to not break through the 50 RSI line, but to move sideways by 30-50. In a downtrend, it is better not to buy than to look at the indicator.

In a downtrend, it often rebounds between 20-30 and rebounds between 40-50.

 

 

A break above the 50 line of the RSI line is important. It is an important point to check the branching phenomenon, which is a trend reversal signal.

 

 

 

 

◆ RSI indicator in an uptrend

 

During an uptrend, the stock continues to rise after breaking through the 50 RSI line, and it is common for the RSI line to continuously remain above 50.

 

It is a strategy suitable for maximizing profits to hold a position continuously until the existing uptrend, which is an existing characteristic, is broken.

It is characterized by a rebound from 50-60 and a rebound wave of 70-80, and the important thing to look at here is a strong selling strength when it breaks 50 and goes down. This heralds a break in the existing trend.

 

 

Even in this case of a trend change, the branching phenomenon is a very important point.

 

 

 

 

◆ Divergence (divergence phenomenon)

 

A strong trend reversal signal can be seen when the RSI indicator is lowering the high while the price is moving higher.

 

In this case, in order not to incur losses, it is advisable to observe the stock price carefully, see the RSI line breaking through the 50 line, draw the stock trend line / RSI trend line, check the trading volume, and check the complex before responding.

 

 

 

 

◆ Pallas swing phenomenon

 

The failer swing phenomenon can be divided into top failer swing and bottom failer swing.

 

If B fails to renew the previous high of A and declines, it signals the end of the uptrend.

 

 

If the stock price declines without renewing the previous high, it signals the end of the uptrend. If the stock price crosses below the previous low or 30%, it responds by selling.