THREAD: Understanding Price Action Like a Pro đ
Mastering Price Action is essential for improving your trading skills! Hereâs how to effectively use RSI, Trendlines, and Volume to make informed trading decisions.
1. RSI (Relative Strength Index)
The RSI helps gauge the strength of a price move by comparing recent gains to losses.
Overbought: RSI > 70 = potential reversal down.
Oversold: RSI < 30 = potential reversal up. Use RSI to spot trend exhaustion and identify potential turning points in the market!
2. Trendlines
Trendlines illustrate the overall market direction.
Uptrend: Draw a line connecting higher lows.
Downtrend: Draw a line connecting lower highs. Breakouts from trendlines can signal major shifts or trend continuationsâso monitor them closely!
3. Volume
Volume indicates market interest in a price move.
Rising volume: Validates price movements.
Decreasing volume: Signals a lack of conviction in the move. Combine volume with price action to confirm breakouts or reversals.
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