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What is spot trading?
If you are new to the world of cryptocurrency, the term "spot trading" may not be familiar to you. However, this is a popular form of trading in the cryptocurrency market that you should know. This article will provide a brief overview of spot trading, including definitions, benefits, and risks.

#7. Divergence trading
What is RSI divergence? Simply put, divergence is when price and RSI go in two different directions. Specifically, we have 4 types of RSI divergence.
1. Bullish Divergence – Bullish divergence
Bullish divergence is when price creates a lower low but RSI creates a higher low.
When RSI bullish divergence occurs, we can expect a bullish market reversal.
For example: You can see in the following chart. A Bullish divergence occurs when the price of the XAUUSD pair makes a new lower low while the RSI makes a new higher low. At that point, we can expect a bullish reversal in XAUUSD.

#6. Combine the RSI indicator with the candlestick reversal pattern
Similar to combining with Moving Average or Bolinger Bands indicators, combining RSI with candlestick reversal patterns also significantly increases trading efficiency, minimizing false signals compared to when using alone. odd.
Trading ideas:
Wait for the market to enter the oversold or overbought RSI zone.
Wait for a reversal candlestick pattern to appear.

#5. Combine the RSI indicator with Bollinger Bands
If you pay a little attention, you will see that RSI and Bollinger Bands are two very interesting indicators:
• RSI is a momentum indicator, it is designed to stay ahead of the market and give a signal about something that is about to happen in the future.
Bollinger Bands are the opposite because Bollinger Bands are a lagging indicator, meaning they follow the price. It provides confirmation signals after the price has run.

#4. RSI Failure Swings
RSI Failure Swings is a strategy recommended by many experts in the field of foreign exchange.
This is also a quite unique trading strategy with RSI by observing the price action of the RSI line at two areas that limit OVERBUYING and OVERSELLING.
The steps to implement this strategy are as follows:
We will wait for the RSI indicator to enter the limit zone (overbought or oversold).
Then wait for RSI to break out of the limit zone

#3. Combine the RSI indicator with Moving Average
Moving Average is an extremely effective trading indicator, there are many traders who trade with a system that only includes Moving Average lines.
So what is the idea to combine Moving Average with RSI?
This system will use the SMA 30 and SMA 100 combined with the RSI indicator to act as a signal filter.
Draw a horizontal line RSI 50 on the chart to observe the system more easily.

#2. This trading method is quite similar to the way I used multi-timeframe RSI that I presented above. It only has one basic difference: how to determine the trend on a large time frame.
For the above method, we have determined the order entry trend by OVERBUY or OVERSELL signals, but now you can use any other technical tool to determine the order entry trend.

You will see that the signals that RSI provides are also factors that lead to basic mistakes traders make when using this indicator. So what is the method to use RSI effectively?
Remember, J. Welles Wilder invented the RSI as an indicator that measures momentum.
When RSI shows OVERBUY levels, it means the market is trending up. We wait for a moment when the market reverses to the downside, but the problem is that the market can continue to remain in the overbought zone for a long time if it is in a strong uptrend. Opposite in downtrend.

There are many traders who use indicators in a very mechanical way, meaning "I do whatever the indicator says".
This is extremely harmful because every trading indicator has its own meanings that you need to understand to be able to use it effectively.
Here are two basic mistakes that many traders often make:
Mistake #1: Making a BUY order when the market is OVERSOLD