Tired of missing trend reversals or not understanding momentum? 🤯 The RSI (Relative Strength Index) can give you the edge you need to accurately predict market movements. 🚀 Here’s the ultimate RSI cheat sheet you need to master now! 🔍👇
1️⃣ Overbuy/Oversell Areas 🚦
Buy Plus:
RSI above 70. 📈
The market may be "overbought" and needs a correction.
Tip: Combine it with bearish candlestick patterns for confirmation.
Oversell:
RSI below 30. 📉
Indicates that the market is "overbought" and ready for a bounce.
Pro move: Look for bullish divergence to catch the trend reversal early.
2️⃣ Variations - Golden Signals 🏆
Bullish divergence 🔥:
The price is making lower lows 📉, but the RSI is making higher lows.
Indicates weak downward momentum and potential reversal.
Bearish divergence ⚠️:
The price is making higher highs 📈, but the RSI is making lower highs.
Indicates that buyers are losing strength - watch out for trend reversal.
3️⃣ Median line intersections 💡
Bullish median line crossovers ✅:
RSI moves above 50 → indicates an uptrend is forming.
Best use: Combine with a breakout above a major resistance.
Bearish median line crossovers 🚨:
RSI drops below 50 → indicates a downtrend is forming.
Tip: Be careful to confirm the size during the intersection.
4️⃣ Determine the direction 📊
Uptrend 🔼:
RSI fluctuates between 40 and 90.
40-50 area = strong support.
Action: Continue the trend until the RSI weakens near 70.
Downtrend 🔽:
RSI stays between 10 and 60.
50-60 area = resistance.
Action: Look for short opportunities when RSI fails to break above 60.
5️⃣ Failure Swings 🔥 - High Resolution Settings
Bullish failure 🟢:
RSI goes above 30, fails to return below, and breaks previous RSI high.
Result: Strong buy signal for reversal.
Downward Failure 🔴:
RSI goes above 70, fails to break it again, and breaks the previous low.
Result: Strong sell signal - likely trend reversal.
How to use RSI like a pro 🚀
Combine RSI with price action: Use candlestick patterns, trend lines, and support/resistance areas.
Wait for confirmation: Don't rely on RSI alone - volume and other indicators reinforce signals.
Avoid RSI Overreactions: Overbuying doesn't always mean "selling" - wait for a divergence or a failed swing.
Set Alerts: Use alerts at 70, 50 and 30 levels to monitor RSI zones.
Trend Trading: In strong trends, the RSI can stay in the overbought/oversold zone for longer – learn to read momentum.
Key points 📌
RSI = Momentum + Overbought/Oversold Signals + Divergence Strength.
Master divergences and failure swing to spot reversals like a pro. 🎯
Combine RSI with volume and price action to get accurate entry points.
🔥Which RSI signal do you use the most? Leave a comment below! Let's trade smarter, not harder! 🚀📈
🔔 Save this post for quick reference