1. Go to tradingview and select Indicators => select RSI indicator.
2. Important RSI milestones that you need to pay attention to:
- Below 30 is the oversold area
- Above 70 is the overbought zone
- The 45-50-55 marks will act as support - resistance
Use case: When RSI is in the overbought or oversold zone and reversal candlestick patterns appear, those will be the most optimal buying and selling zones. (Remember to pay attention to the volume of candlestick patterns. If you have not seen lesson 1, please study lesson 1 first).
RSI below 45 => Bear Market.
RSI is above 55 => Bull Market
3. RSI divergence: When the price line and technical indicators go against each other, divergence will appear => the main trend of the market is weakening.
Divergence in the oversold area (below 30) will be called a bottom divergence and a divergence in the overbought area (above 70) will be a top divergence. Usage is similar to overbought and oversold areas. When candlestick reversal patterns appear in divergence areas, these will be good buying areas or good selling areas.
Summary: This is an indicator that helps you find the most optimal entry and selling area. Not the holy grail, RSI needs to be combined with candlestick reversal patterns to get the best results. Priority is given to use from H4 frame or higher.
