Relative strength indicators -RSIApplication principles of indicators

Firstly,RSIThe size of the value:
RSIThe range of changes is within0~100Between them, the strong and weak indicator values are generally distributed in20~80As shown in the table.

The terms' extremely strong ',' strong ',' weak ', and' extremely weak 'here are only relative analytical concepts and are relative regions. Some investors also value them as30、70or15、85Additionally, regarding the items takenRSIThe differences in parameters and stocks,RSIThe judgment of the value size may also vary, which will be further explained in the following section.


Secondly,RSIOverbuying and overselling of numerical values:
Generally speaking,RSIThe numerical value is80Above and20The following are the boundaries of overbought and oversold areas.
（1）WhenRSIValue exceeds80At this time, it indicates that the overall market strength is too strong, with multiple forces far greater than the bearish forces. The balance of power between the two sides is vastly different, with multiple parties winning. The market is in an overbought state, and there may be a pullback or reversal in the market in the future. At this time, investors can sell their stocks.
（2）WhenRSIValue below20When there is more selling than buying in the market, it means that the bearish forces are stronger than the multi-party forces. After the bearish forces launch a large-scale attack, the market falls too much and is already oversold. The stock price may rebound or turn around, and investors can build positions and buy stocks in moderation.
（3）WhenRSIThe value is in50When left or right, it indicates that the market is in a state of consolidation, and investors can wait and see.
（4）The definition of overbought and oversold areas should be determined by investors based on the specific market conditions. In the general market,RSIValue in80The above can be called an overbought area,20The following can be referred to as oversold areas. But sometimes in special ups and downs,RSIThe division of oversold and overbought areas depends on specific circumstances. For example, in a bull market or for bull stocks, the overbought area can be defined as90In a bear market or for bear stocks, the oversold area can be defined as10The following (which is relatively small compared to parameter settings)RSISpeaking of which, if the parameter settings are large, thenRSIDifficult to reach90Above and10Below).


Thirdly, long and short-termRSIIntersection of Lines:
short-termRSIIt refers to parameters that are relatively smallRSILong termRSIIt refers to parameters that are relatively largeRSIFor example,6dayRSIand12dayRSIIn,6dayRSIThat is, in the short termRSI，12dayRSIThat is, long-termRSILong Short TermRSIThe intersection of lines can serve as a method for us to assess market trends.
（1）When in the short termRSILong termRSIAt that time, the market belongs to a bull market;
（2）When in the short termRSI
（3）When in the short termRSIThe line breaks through the long-term trend from a low level upwardsRSIWhen in line, it is generallyRISThe indicators“goldCross "is a buy signal;
（4）When in the short termRSIThe line breaks through the long-term trend from a high position downwardsRSIWhen in line, it is generallyRSIThe 'death cross' of the indicator is a sell signal.

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