Title: RSI opening in the cryptocurrency shop: Guide to beginners
Marking
The cryptocurrency trade has become increasingly popular and competitive, and merchants are constantly looking for new tools to benefit. One of the most effective tools used by cryptocurrency traders is the relative power indicator (RSI). In this article, we deepen the RSI world and provide a guide to beginners on how to use better commercial decisions.
What is a relative power indicator (RSI)?
Relative strength indicator (RSI) is a popular technical analysis tool that measures the intensity or weakness of the shares in stock prices. The RSI, developed by J. Welles Wilder in 1978, calculates recent price changes to determine the purchased and sold -out terms.
How does RSI work?
To calculate RSI, you will need two basic values: a 14-speed simple transfer medium (SMA) and a 50-speed SMA. The formula is as follows:
RSI = (100 – (100 – (B / S)) / (2 * B)
Where:
– B is the number of times
– S is a handicap factor that ranges from 7 to 13, which determines the calculation period
Interpretation of RSI values
The healthy RSI value is between 30 and 70. When the value drops below 30, it may indicate valuable conditions, while values of more than 70 mean are sold out.
* purchased (more than 80): The supply is likely to be due to lifting or repair.
* Over -20 (less than 20):
Accessories are likely to be due to reflection or reflection.
How is RSI used in cryptocurrency trade
Now that we are studying the basics of RSI, we are immersed in using it in the cryptocurrency trade:
- Entrance Score: When you notice the potential purchasing signal of a potential purchase sign, use RSI to determine whether the price is overloaded or sold out.
RSI (b/s) = 100 – (100 – (b/s))
When the value drops below 30 and stays above 70, it can be considered sold out. If you are a stubborn investor, this may indicate that the actions have achieved resistance and reflect.
- Loss of Stop: When feeding long positions, use RSI to determine whether the stop loss should be corrected based on the price campaign.
For example, if you notice 10,000 income points with RSI (b/s) = 30, use it as a reference to the STOP loss setting.
- Recognition of Design: When merchants feel more comfortable to use RSI in their trade strategy, they begin to identify models and signal combinations that can lead to profitable transactions.
- Risk Management: When introducing short stations or sales in strong trends, RSI will help you identify a potential risk, indicating overloaded conditions.
For example, when RSI is over 70 and the price is popular, it may be a sign that the trend has become too aggressive, suggesting that action can repeat.
App
Relative Power Indicator (RSI) is an effective tool for cryptocurrency traders who want to make better decisions. Understanding RSI acts and applying rules, you can see any purchase or sales signals in real time, which makes events more conscious and profitable.
However, it should be remembered that RSI is only one part of a comprehensive trade strategy. It is necessary to combine other technical analysis tools, market mood indicators and basic analysis techniques to create an effective trade plan.
Additional tips
- Remember to limit the use of RSI: it only measures the last price changes, without ignoring the previous results.
- Use many time frames for trend analysis and signal confirmation.
- Do not trust RSI only on your commercial decisions; Combine it with other tools and techniques to get a more balanced approach.
Given RSI as a valuable addition to a set of cryptocurrency trading tools, you are on the right track to become a qualified merchant. Have a good deal!