RSI Flashcards
RSI is what?
RSI is a momentum oscillator that measures speed of price change
Oversold / overbought, what to be careful of?
In bull or bear market it can be at one extreme for a long time (like any indicator RSI can give false signals)
What number is overbought in a bull and bear market
What is oversold in a bull and bear market
Chop market? What are they
Bull market -
overbought = 80
oversold = 30
Bear market -
overbought = 70
oversold = 20
Chop / range -
overbought - 70
Oversold - 20
RSI, what to be careful of?
What triggers a long in a bull trend
What triggers a short in a bear trend
Trade with the trend (don’t BET ON a reversal with RSI alone
Crosses above 30 in a bull trend, go LONG
Crosses below 70 in a bear trend, go short
50 level midpoint in RSI underused
What 3 things can it tell us?
Hints
Bia
Rev
Con
- Indicator whether there’s a bullish or bearish bias in a trend
- Suggest a trend reversal (as a supporting indicator not a leading one)
- Indicator period of consolidation
50 mid point
- Indicator whether there’s a bullish or bearish bias in a trend
Describe what this looks like on the chart
See top 1
Describe what below looks like on a chart when it comes to RSI
- Suggest a trend reversal (as a supporting indicator not a leading one)
Describe what the RSI looks like when the below is on a chart
- Indicator period of consolidation
What time frame does cryptos cred use the RSI on?
The daily
What does indicator suggest if it’s above 50 or below 50?
Should it be used on its own?
Can RSI have its own trend line?
Should be used in confluence with other indicators
Stays above 50 - could go long
Stays below 50 - could go short
What’s the most important is of RSI (according to crypto cred)
Spotting divergence (when price is donna something different from the RSI oscillator)
What is divergence
What’s hidden and not hidden divergence
It’s when oscillator and price are doing something different
Chat GPT summary
Regular divergence is a situation where the price of a security is making higher highs or lower lows, while the RSI is making lower highs or higher lows. This can be an indication that the underlying trend is losing strength and a reversal may be imminent.
Hidden divergence is similar to regular divergence, but the divergences between the price and the RSI are not as obvious. This can occur when the price is making a series of small highs or lows, while the RSI is making a larger high or low. Hidden divergence can be a subtle signal of a potential trend reversal.
It’s important to note that divergence, whether regular or hidden, is not a standalone trading signal and should be used in conjunction with other technical and fundamental analysis tools. Some use just RSI divergence though.
describe hidden and normal divergence as it appears in a chart
RSI Divergence helps avoid what at top or bottom?
Helps do what in a bull or bear market
Helps spot fading momentum and reversals
Helps avoid selling top or buying bottom
What is an RSI failure swing
What is RSI failure swing low
