š„ Understanding RSI and StochRSI š„
RSI (Relative Strength Index) and StochRSI (Stochastic RSI) are key tools in technical analysis for crypto trading. They help identify overbought or oversold conditions in the market. This guide explains both indicators using $BTC /USDT on Binance as an example.
What is RSI? š
RSI is a momentum oscillator that measures the speed and change of price movements. It ranges from 0 to 100:
- Overbought: RSI above 70
- Oversold: RSI below 30
If BTC's RSI reaches 75, it's overbought, suggesting a potential price drop. Conversely, an RSI of 25 indicates oversold conditions, suggesting a potential price increase.
What is StochRSI? š
StochRSI is a more sensitive indicator, providing a stochastic version of RSI. It ranges from 0 to 1:
- Overbought: StochRSI above 0.8
- Oversold: StochRSI below 0.2
š”Combining RSI and StochRSI
Using both indicators together provides a more comprehensive view. For instance, wait for both RSI and StochRSI to confirm overbought or oversold conditions before making a trade.