What is the rsi technical indicator? The rsi technical indicator is a relative strength indicator that reflects changes in supply and demand and buying sentiment through the ratio of the amplitude of the market to rise and fall over a period of time. The parameter indicators in the stock trading software are usually rsi1 (white line) 6, rsi2 (yellow line) 12, rsi3 (purple) 24, and the smaller the period adjustment of the parameter indicator, the greater the amplitude.
RSI indicator usage tips
When the overall fluctuation of the graph in the rsi technical indicator is in the range of 0-100 amounts, 100 is the top of the graph, 0 is the bottom of the graph, and 50 is the central axis of the graph. When the graphical movement is above the 50 central axis, it indicates that the stock price is in a strong recovery bullish range. When the graphical movement is below the 50 central axis, it indicates that the stock price is in a weak adjustment range. When the graphical movement oscillates near the 50 midline, the effectiveness of the technical indicator is weak.
The white line trend of the rsi technical chart repeatedly falls below 20 after oscillating in the range around 20, and when it continues to fall below the break, it indicates a selling point signal in the technical chart. If the white line trend of the rsi technical pattern repeatedly breaks through 80 after oscillating in the range near 80, and the continuous upward breakout indicates a buy signal in the technical chart.
When the market trend and technical graphics are in an uptrend, the white line crosses the yellow and purple lines, indicating that the graph gives a buy point signal. Conversely, both the market trend and the technical graph are in a downtrend, with the white line crossing the yellow and purple lines, indicating that the graph gives a selling point signal. Investors should pay attention to the technical graphical trends and market trends as reference trends.
If the line level is above 80 in the rsi technical graph, it forms an m-shaped pattern, indicating a signal with a high probability of downward reversal adjustment in the short term. If the w-shaped graph is formed in the rsi technical graph where the line is below 20, it indicates a signal with a high probability of upward reversal adjustment in the short term. At the same time, there will be market signals in the technical chart of bottom divergence and top divergence in the rsi technical indicator.
Overall, the rsi technical indicator is a reference given by the relative strength of the cyclical market. There are no perfect technical indicators in the market, and there will be some misleading information. RSI technical indicators can be combined by trading volume, kdj, macd and other indicators, combined with other indicators and market conditions and individual stock conditions to improve the success rate.
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