What is the Relative Strength Index (RSI), and how do you use it?

Developed by J. Welles Wilder in 1978, the Relative Strength Index(RSI) is a momentum oscillator that measures the speed and change of price movements.

#TradingSignals #RSI

🧑‍🏫Let's Learn!

Educational 🧵👇

1/ The RSI is an oscillator with a range from 0 to 100

There are 3 main values of interest:

🔵Below 30 signals that the market is oversold 📉

🔵50 signals neutral 😐

🔵Above 70 signals overbought 📈

2/

Risk Management is the most important factor in trading, and MUST be at the core of your trading strategy. If you made a ton of money in 2021, and then lost 80% of it in 2022 so far, you're not going to be a trader for very long.

How to create your own risk management plan:
🧵👇 1. Come up with a set amount that you want to allocate for long term investing, and an amount for short term trading. Long term should heavily outweigh your short term trading. For example, 80% long term investing, and 20% for short term trading. Keep these accounts separate.

How can we know if a correction, or bear market, has ended? In this thread I'll go over the previous correction from March 2020, and how it can help us with our current market.

A✅list of things to look for to confirm a recovery has started.
$SPX $SPY $ES $BTC $ETH
🧵👇 First, how do we know the bear market is continuing? Well the obvious answer is $SPX makes a lower low breaking $3636.87. Because every market recovery starts with a low that remains the low.

$BTC and $ETH have managed to stay above the 8EMA for three whole days. That's awesome. Sitting in between the 8/21 however means "Wait and see". It's progress, but we aren't there yet. A confirmed 8/21 cross is what we want. ALT's may be a different story.
More below👇 If we get that 8/21, #Bitcoin still needs to get through numerous downtrends, and they're really far away. There is a CME gap above, which tend to become magnets. This is a potential target, IF, we get a reversal confirmed to the upside.

$ETH look at this little guy! Let's keep it going!

$BTC you still have some work to do.

ETH has made it to the 21EMA on the daily. BTC approaching. Safe to say we get our 3 daily closes over the 8EMA unless something catastrophic happens in the next 45 min
#Bitcoin #Ethereum $ETH hasn't touched it's 21 EMA since May 5th. We may have the beginning of something here.

Weekly look ahead: $BTC making the same pattern over and over again. You keep doing the same thing and buying the dip expecting different results? That's the definition of insanity. Come join us in Defi Dojo(Link in my bio), we will be ready when it's time to buy.
#BTC #Bitcoin $NQ $QQQ still above the mid line in this falling wedge on the daily. This pattern is bullish, however there's still plenty of room below it. With CPI data on July 13th I expect volatility leading into that.

7 Tips Every Trader Should Know✊

Whether you're a🐂or a🐻, everyone should have their own set of rules to follow. You're trading plan is your guide to success. Here are 7 tips I've learned to live by, and you should too. #Bitcoin #SPY #ETH #Crypto
🧵👇 1. Establish a plan!💯

Plan your trades carefully before you enter a position. This means having the price you want to enter, a stop loss, and a take profit zone BEFORE you enter a position. If you aren't doing this, you're probably losing money.💸

Here's our weekly look ahead: $ES has a good chance to reach $4000 again this week. After that it will need to hold above this downtrend for continuance. $NQ has just peaked above the downtrend in this falling wedge pattern. Watch to see if it gets above and holds this week. If it can't expect a retrace back down to at least the middle line.

Ok, so we've had a relief bounce, and a lot of #altcoin's have had some really nice gains. But, let's be realistic. #Bitcoin #BTC $BTC
🧵👇 $BTC still can't even get over the 8EMA on the daily chart. Higher time frames are always king.

$SPY We had a bullish 8/21 cross for a little while, but straight back down to bearish territory again today. With CPI data releasing at 8:30am EST tomorrow. The chart is telling us in advance what we can possibly expect.

Bearish MACD, RSI, 8/21, under Pivot. Not a good look. $NQ in the same boat. I imagine crypto may suffer the same fate soon.

Let's take a look.

Here's a side-by-side of $SPX and $BTC since the March 2020 crash. Turns out it wasn't a crash, but just the dip before the rip! Now, what can we say? Well, mostly that people are taking profits after a massive increase taking advantage of retail traders like you and I.
🧵👇 I know a lot of people who are hurting. They just started investing for the first time recently. Most likely baited by the media, crypto Twitter price targets, or friends who showed them their huge gains. They just bought on word of mouth without doing any research.

Short term falling wedge. Potentially bullish set up with bullish divergence. $ETH I've entered long on this with a stop just below the wedge. Let's see how it plays out. Short term price target is $1,940. Stop loss at $1,680. Entry is $1,730. I'm risking $50 to win $210. That's a 4:1+ R/R. Can this trade lose? Yes, but it's a calculated risk I'm taking.

Support and Resistance Explained:

I'll use Facebook(FB) stock for this example. Starting with a blank chart, on a high timeframe like the daily or weekly. I'm starting with the weekly because it offers more information to start. $FB
🧵👇 Look for the places where the price reacted more than once in the same location. The goal is to try and get as many candle touches on the line as possible. I like to mark areas of resistance in red(above current price), and support in blue(below current price).

CANDLESTICK PATTERNS📈🕯️📉:

Today we are going to take a look at what the candles in a chart can tell us. There are many different candlestick patterns, and they can give clues to where the price could be going. Not all candlestick patterns work as well as others.
🧵👇 Increase in popularity has lowered their reliability because they've been studied by hedge funds and algorithms. These whales rely on super fast execution to trade against retail investors who execute technical analysis strategies found in books.

Technical Analysis 101

Steps:

1.Identifying the trend

There are main trends and then trends inside trends. Figuring out the direction is easy, but different time frames can give mixed results. Higher time frames are always more reliable, and where we find main trends.
🧵⬇️ 2.Drawing support and resistance levels

Support and resistance levels are areas where the price is likely to reverse or set up for a breakout. A support level is where the price will find demand in a downtrend and turn upward. Vice-versa resistance will reject and turn downward.

After testing half of the gap below, $BTC has had a small relief bounce. Every time frame is still pointing downward, and it's very possible for it to finish filling the gap below before returning to fill the gap above.
🧵⬇️ The monthly 8/21 moving averages are getting closer to crossing and pointing downward. This is super bearish, and if they cross, I would expect a lower low or at least a retest of the low.