𝐔𝐧𝐝𝐞𝐫𝐬𝐭𝐚𝐧𝐝𝐢𝐧𝐠 𝐑𝐒𝐈 & 𝐌𝐚𝐫𝐤𝐞𝐭 𝐌𝐨𝐦𝐞𝐧𝐭𝐮𝐦
Many traders blindly follow indicators like RSI, thinking they’re magic. Let’s break it down the right way:
𝟏) 𝐖𝐡𝐚𝐭 𝐢𝐬 𝐑𝐒𝐈?
RSI (Relative Strength Index) measures momentum how fast price moves up or down.
Above 70 → Overbought (possible reversal)
Below 30 → Oversold (possible bounce)
𝟐) 𝐇𝐨𝐰 𝐭𝐨 𝐔𝐬𝐞 𝐑𝐒𝐈 𝐂𝐨𝐫𝐫𝐞𝐜𝐭𝐥𝐲:
Don’t trade RSI alone combine with price structure & support/resistance
Look for divergence: when price makes a new high but RSI doesn’t → trend weakening
𝟑) 𝐒𝐩𝐨𝐭 𝐯𝐬 𝐅𝐮𝐭𝐮𝐫𝐞𝐬 𝐂𝐨𝐧𝐬𝐢𝐝𝐞𝐫𝐚𝐭𝐢𝐨𝐧:
Spot: RSI signals can guide entries safely
Futures: RSI can trigger false signals in high-leverage moves
𝟒) 𝐊𝐞𝐲 𝐓𝐚𝐤𝐞𝐚𝐰𝐚𝐲:
RSI is a tool, not a crystal ball. Pair it with volume, liquidity zones, and trend structure for real edge.
💡Pro Tip: Even if RSI shows overbought, wait for confirmation from price & volume before entering. Patience > impulsive trades.
