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A little Information for a Simple Indicator,RSI.

The RSI indicator is a technical analysis tool that measures the strength and speed of price movements in a security. It can help traders identify overbought and oversold conditions, as well as potential trend reversals and buy and sell signals. Here is some information about the RSI indicator from various sources:

the RSI indicator was developed by J. Welles Wilder Jr. and introduced in his 1978 book, New Concepts in Technical Trading Systems. The RSI is displayed as an oscillator (a line graph) on a scale of zero to 100. Traditionally, an RSI reading of 70 or above indicates an overbought situation, and a reading of 30 or below indicates an oversold condition. The RSI can also indicate divergence, failure swings, and trend signals when it crosses the horizontal reference levels of 30 and 70.

RSI indicator can be used to generate buy and sell signals in different ways. Some of the common methods are:

- Buying when the RSI indicator crosses above the oversold line (30) and selling when the RSI indicator crosses below the overbought line (70).

- Buying when the RSI indicator forms a bullish divergence with the price, meaning that the RSI indicator makes a higher low while the price makes a lower low, and selling when the RSI indicator forms a bearish divergence with the price, meaning that the RSI indicator makes a lower high while the price makes a higher high.

- Buying when the RSI indicator breaks out of a falling wedge pattern and selling when the RSI indicator breaks down from a rising wedge pattern.

- Buying when the RSI indicator forms a positive failure swing, meaning that the RSI indicator falls below 30, rebounds above 30, pulls back, holds above 30, and then breaks its prior high, and selling when the RSI indicator forms a negative failure swing, meaning that the RSI indicator rises above 70, drops below 70, bounces, fails to exceed 70, and then breaks its prior low.