Name: hidden models RANNING using a relative strength index (RSI): Cryptocurrency Manager Trade Manager
Entry
Cryptocurrencies were the basis of digital economy, because many investors tried to use their potential. However, browsing on an increasing market can be intimidating even for experienced buyers. One powerful tool that can help determine trends and predict prices is a relative force indicator (RSI). In this article, we will examine how to use RSI to get a deeper understanding of cryptocurrency markets.
What is the relative force indicator (RSI)?
The relative strength indicator (RSI) is an impulse indicator, which in 1978 created by J. Welles Wilder. This measures the number of changes in the latest price to determine the conditions of overcrowded or resale. RSI ranges from 0 to 100 and a higher value indicates increased market variability.
How to use RSI market trends to determine
To effectively use RSI trade, follow the following steps:
- Choose a reliable data source : Select a reliable cryptocurrency price provider such as Binance, Coinbase or Kraken.
- Calculate RSI : Get current and previous price values for each cryptocurrency. RSI Calculate the formula Use:
* Previous closure: $ \ frac {\ text {high} – \ tex
* Close: $ \ frac {\ text {current close} – \ text {previous closure} {\ tex
- Set RSI levels
: Use the predefined RSI threshold to determine overcrowded and overcrowded conditions (e.g. 70):
* Overbook: $ RSI> 70
* Sales: $ RSI <30
- RSI Analysis : Look for trends according to the following models:
* Increase RSI by over 80, shows a growing pulse
* Reduced RSI less than 20 by signaling the reduction of market pressure
- Connect RSI with other indicators : Use RSI as one of several tools for setting possible peaks and DNA.
Advanced techniques: Using many indicators to get better results
To improve the trade strategy, consider the connection of RSI with other technical indicators:
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Tips and tips
* Use 14 periods of RSI : This short -term indicator ensures faster confirmation of trends.
* Avoid using RSI as a loss of stop : Use it only to the size of the position and risk management.
* Follow MacD (sliding convergence differences) : A popular impulse indicator that can help determine the filled and resale conditions.
Application
The relative strength indicator is an invaluable tool for determining market trends in cryptocurrency markets. By combining RSI with other technical indicators, you can create a reliable trade strategy that will help you browse the continuous cryptocurrency landscape. Remember to always exercise risk management and remain disciplined during a trade.
Refusal of responsibility: This article is only for information purposes and should not be considered as investment guidelines. Cryptocurrency trading includes a characteristic risk, so it is important to conduct detailed research before making any investment decisions and consult a financial advisor.