How to use RSI indicator

There are many types of indicators in the technical analysis of the stock market. The RSI indicator is also called the relative strength indicator. As the name suggests, the RSI indicator is used to evaluate the strength of the long and short forces. So how do you use the RSI indicator? How do you use the RSI indicator?

?There are four main uses of the RSI indicator, as follows: 1. Look at the shape of RSI: when RSI forms a W-shape or a head-and-shoulders bottom shape at a low level or bottom, it is a buying pattern; when RSI forms an M-shape or a head-and-shoulders shape at a high level or top

When it is in a top shape, it is a selling pattern.

2. Look at the value of RSI: when RSI runs below 20, it enters the oversold zone, and the market outlook is prone to rebound; when RSI runs above 80, it enters the overbought zone, and the market outlook is prone to decline.

3 Look at the RSI crossover: When the short-term RSI crosses the long-term RSI upward, it is a golden cross, which is a buy signal; when the short-term RSI crosses the long-term RSI downward, it is a dead cross, which is a sell signal.

4. Look at the divergence of the RSI indicator: When the stock price and the RSI indicator continue to hit new lows, but the RSI is higher and higher, it is called bottom divergence, which is a buy signal.

When a stock index or stock price reaches a new high, but the RSI is decreasing, this is called top divergence, which is a sell signal.