First, the value trading law
Taking 50 as the watershed, RSI greater than 50 is a strong city, and less than 50 is a weak city. Above RSI is an overbought area, which is easy to form a short-term retracement; Below 20 is an oversold area, which is easy to form a short-term rebound.
Second, cross-selling method.
RSI indicators are usually composed of three RSI lines with different periods, which are divided into short, medium and long RSI lines. When the short, medium and long RSI are below 20, and the short-term RSI crosses the medium-term RSI to become the first buying point, when the short, medium and long RSI are in a long position and exceed 50, it is a bullish strong region.
Third, the form of buying and selling law.
Morphological analysis is applied to RSI indicators, and it can be used as a buying and selling signal according to the inverted patterns of head, shoulder, bottom or top, double bottom or top in overbought and oversold areas, as shown in the following figure.
Fourth, deviate from the sales law.
Every wave of stock price is low, and conversely, every wave of RSI is high, which is the bottom deviation, and the probability of stock price reversal is relatively high. On the contrary, it is a top deviation.
V trend line trading method
Like stock prices, RSI indicators can also apply trend lines. Make a trend line on the RSI line. When RSI falls below the trend line, it is a sell signal, and when RSI breaks through the trend line, it is a buy signal.