Title: Unlock RSI power in the cryptocurrency trading: a guide for beginners
Introduction
The trading of cryptocurrencies has become more and more popular and competitive one of the most effective tools used by cryptocurrency traders is the relative force index (RSI). In this article,
** What is the relative force index (RSI)?
The relative force index (RSI) is a popular technical analysis tool which measures the strength or weakness of the action of actions. Developed by J. Welles Wilder in 1978, RSI calculates the extent of recent price changes to determine the conditions of overchat and occurrence.
How does RSI work?
To calculate RSI, you need two primary values: the simple mobile average of 14 periods (SMA) and the SMA of 50 periods. The formula is as follows:
RSI = (100 – (100 – (b / s))) / (2 * b)
Or:
– B is the number of periods
– S is a smoothing factor which varies from 7 to 13, which determines the computing period
Interpretation of RSI values
A healthy RSI value is between 30 and 70.
* Overbought (above 80): The stock is probably due for withdrawal or correction.
* Oversold (less than 20): The stock is probably due for a rebound or a rebound.
How to use RSI in the trading of cryptocurrencies
That
- **
RSI (b / s) = 100 – (100 – (b / s))
When the value falls below 30 and remains greater than 70, it can be considered as a condition of occurrence. If you are an optimistic investor,
2
RSI (b / s) = 30, use it as a reference to define your stop-loss.
- Recognition of the model:
4
Instance, when
Conclusion
The relative force index (RSI) is a powerful tool for cryptocurrency traders that seek to make better decisions. Its principles,
However, keep in mind that RSI is only part of a complete trading strategy. Analysis to create an effective commercial plan.
Additional advice
.
- Use several deadlines to analyze trends and confirm the signals.
- RSI for your commercial decisions; Combine it with other tools and techniques for a more balanced approach.
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