Continuing from the previous article, it is the master brother of Zhu Sanqi. He escaped from the 2015 stock market crash and cashed out all Bitcoins at the high level in 2017. He is a legendary figure. The senior brother shared the secret of trading volume: "When the price rises, the volume increases, and when the price falls, the volume decreases." Just like yesterday, a reader left a message "What if the exchange washes the volume and the trading volume is fake"? Zhu Sanqi also asked the same question at that time.
The senior brother shook his white fan and said, "Then use the relative strength (RSI) technical indicator! RSI is an indicator that does not lie!"
"Blockchain Tool Treasure Box" For novice users, let everyone know what tools can be used and in which scenarios they can be used.
There are three common ways to make money in the currency circle: speculating on coins, moving bricks, and mining. Now is the "Coin Speculation Chapter".
Relative Strength Index (RSI), relative strength index. It is a technical curve produced based on the ratio of the number of rising points and the sum of rising and falling points in a specific period. RSI can reflect the prosperity of the market in a specific period. RSI was first used in futures trading by Welles Wilder, and was later widely used in short-term investments in the stock market and short-term spread operations.
RSI has proven to be a viable indicator for predicting price movements.
Calculation formula
RSI = (average recent increase/(average recent increase + average recent decrease))x100
The calculation steps are as follows:
p>
The average recent increase = (2+1+2+4)/6 = 1.5
The average recent decrease = (1+2)/6 = 0.5
RSI = (1.5/(1.5+0.5)) * 100 = 75
RSI analyzes and measures the strength of the buying and selling power between long and short parties through the rise and fall of the index, thereby inferring the direction of future price changes.
Commonly used trend analysis is as follows:
1. Judge the market based on the RSI value
According to Wilder’s point of view, any trend exceeding 70 Any number below 30 should be considered oversold.
An RSI between 30 and 70 is considered neutral, and an RSI of about 50 means "no trend" and the market is in a consolidation period with balanced buying and selling power.
But some traders believe that Wilder's overbought/oversold ranges are too wide and choose to change those ranges. For example, for a market that changes violently, such as the currency market, it can be specified as overbought if it is above 80, and oversold if it is below 20**. That is:
When the RSI value is >80, it indicates that the market has become overbought, and the currency price will fall at any time due to the weakening of the buying momentum. The operation is generally to gradually reduce positions on rallies.
When the RSI value is <20, it indicates that the market has become oversold, the price is not far from the bottom, and the currency price will rise at any time due to the intervention of buying orders.
Of course, this value is completely determined by the trader.
2. Judge the market based on the short-term (such as 5-day) and long-term (such as 10-day) RSI curves
When the RSI of short-term days > the RSI of long-term days, it is Bull market;
For example:
When the short-term RSI stops falling below 20 and stabilizes, and crosses the long-term RSI, it is technically called a "golden cross" and is regarded as a "buy" Signal".
When the short-term RSI is above 80 and enters the overbought zone, it shows that the power of the long side is far greater than the power of the short side. Of course, it also shows that the current market is overheated and may be shorted at any time.
When the RSI of short-term days < the RSI of long-term days, it is a short market;
For example:
The RSI value is below 50, which is a weak market. The trend is down.
If the short-term RSI suddenly turns around and crosses the long-term RSI, it is technically called a "death cross" and is considered a "sell signal."
There are also uses such as the difference between price and RSI, trend confirmation, etc. This article will not go into details.
The steps are as follows:
The first step, select the BTCUSD chart we saved yesterday (click to see how to save and open the chart again at the end of the article.
The second step, Add an indicator. Open the indicator search RSI and click Add. The page will display RSI. Click the x next to RSI to remove RSI.
Click the triangle on the right to go up. Move it above Vol (volume).
Click on the double triangle symbol to enlarge the RSI to occupy the entire chart pane.
Third. Step 1: Set parameters.
Click the gear symbol to the right of the small gray word RSI on the panel.
Length: 14 days is the default time period. value.
We can change it to 20 days, click OK.
Resource: determines which data in each bar will be used for calculation.
p>You can also set the style: color, upper and lower limit values, background color, etc. Generally, you can use the default value.
The fourth step is to slide the mouse up and down to zoom in and out of the chart.
Swipe up to zoom out and slide down to zoom in:
Step 5: Create an alert
Right-click and click "Create Alert" to target trading volume. Set the alarm. After clicking OK, you can see "Manage Alerts" on the right side of the panel. The free version currently only supports one alarm, so you need to delete yesterday's alarm and create a new alarm.
Note: The free version only supports one alarm. A layout supports up to 3 indicators and strategies. The PRO, PRO Plus or Premium version supports more indicators.
Dear, do you know how to operate it?
Learned it today? Set up the relative strength RSI indicator to judge the market! Go and try it!
Some readers said that the screenshots given in the previous article did not reflect "price increases, volume increases, prices decrease, volume decreases" etc. Rules!
Tomorrow, Zhu Sanqi will talk about common analysis examples of three technical indicators-MA, trading volume, and RSI!
See you tomorrow!
Disclaimer: This article is only the author’s independent opinion and does not constitute any investment opinions or recommendations.
Zhu Sanqi has put a collection of articles on the website of the currency circle Golden Horse Awards community, Sister Bi!
Click the link to see Zhu Sanqi’s Blockchain Tool Treasure Box collection. /category/blockchain/blockchain-tools/
Thanks for reading! Thanks for the like!