How to use RSI to find buying and selling points

Overbought vs. Oversold: The RSI indicator above 80 is called overbought (meaning that you can't go long); 20 The following is called oversold (meaning that you can no longer short).

Usually: the indicator is basically between 30-70.

The advantage of the RSI indicator is that it is clear when it is overbought and when it is oversold, so that people can better grasp the timing of entering positions.

When the RSI curve forms a high reversal pattern such as M head or triple top at a high level (above 50), it means that the upward momentum of ** has been exhausted, ** there is a possibility of a long-term reversal**, and investors should close their positions in a timely manner.

When the RSI curve forms a low reversal pattern such as W bottom or triple bottom at a low level (below 50), it means that the momentum of the company has weakened, and it is possible to build a medium and long-term bottom.

When the value is below 20, the long-term RSI value of RS12 is crossed from the bottom to the top.

The short-term RSI value is above 80, and the long-term RSI value of RSI2 is crossed from top to bottom, which is a sell signal.

3.The short-term RSI value breaks through 50 from top to bottom, which means that ** has weakened (long orders are not done for the time being).

4.The short-term RSI value breaks through 50 from the bottom to the top, which means that ** has become stronger (short orders are not done for the time being).

5.When the RSI value is above 80 and enters the overbought zone, it may form a short-term at any time.

The shorter the time frame of the indicator, the more meaningless it is!

1.Contrarian trading method.

When the RSI value enters below 20 after a wave of rapid growth, it means that the stock price has entered the oversold zone. At this stage, it is easy to have a trend that must be reversed, and if there is a divergence from the bottom of the indicator, the stock price can be bought in the middle of the yang line. When the stock price after a wave of rapid rise, the RSI value into more than 80, indicating that the stock price has entered the overbought area, this stage is easy to appear boom and bust trend, if there is a top divergence of the indicator, the stock price appears in the yin line can be out.

2.Homeopathic buying and selling.

The homeopathic trading method is suitable for unilateral potential or bias, which mainly uses the characteristics of the system and RSI indicators to guide trading. When the RSI indicator crosses above 50, it means that the stock price enters a strong area, at this time, if the stock price crosses above the 13th**, and the 13th** turns upward, investors can buy with the trend. On the contrary, when the stock price crosses the 13th**, the 13th** begins to turn downward, and the RSI also crosses 50, it means that the trend has chosen to go down, the stock price has entered the weak zone, and investors can sell with the trend.

3.Indicator resonance buying and selling.

The indicator resonance trading method mainly uses the characteristics of RSI and WR indicators to guide investors to buy and sell. Both the RSI and WR indicators are oscillating indicators, and both of them judge the strength of the market through the central axis. It's just that the RSI is above 50, and the larger the value, the stronger the market; The WR is the opposite, when the WR is below 50, the smaller the value, the stronger the market.

We can then use the indicator overlay of RSI and WR to guide buying and selling.

1 In terms of technical analysis, the RSI indicator is known as the relative strength index. This indicator analyzes the intention and strength of market buying and selling orders by comparing the average increase and average decline over a period of time, so as to analyze the future market trend. Using the RSI indicator to find market bottoms is a convenient method.

The rules used by the RSI indicator are: the N parameter of the RSI indicator is set, and the N parameter of the RSI indicator is set to the 7th, 14th, and 21st respectively. When the stock price has undergone a large adjustment trend, closely observe the bottoming signal of the "RSI" indicator, and require that the 7-day RSI is less than the daily RSI indicator must be less than the daily RSI indicator less than 30.

When the RSI indicator reaches the above criteria, if the stock price continues**, and the RSI indicator shows a clear stop signal and deviates from the stock price trend, you can focus on it.

If the RSI indicator crosses the 7-day line above the 14-day line and the 14-day line crosses the 21-day line, and the RSI three lines show a bullish arrangement, it indicates that the RSI indicator has completed the prompting role of the signal. When the RSI indicator meets the above technical requirements, investors need to observe the movement of the trading volume. There are two ways to look at volume:

One is whether the trading volume is extremely shrinking when the above technical characteristics of the RSI appears, or even the volume level. If the trading volume is scarce, it indicates that the stock is about to complete the bottom, and investors can actively intervene. Another kind of quantitative observation is that when the stock completes the bottom, investors intervene in time, it is necessary to observe whether the stock can have a substantial incremental capital intervention process, if it cannot be effectively increased, it means that the current bottom is still a stage bottom, and investors need to be treated as ******.

If the stock can be effectively and continuously amplified after the successful bottoming, investors can regard it as an important bottom.