Category: Money Tips Date: 2005-12-25
Relative Strength Index RSI is used in futures trading in the first, and later it was found that the indicators used to guide the effects of stock market investment is also very good, and the characteristics of the indicators continue to be summarized and concluded. Now, RSI has become the most widely used technology investors, one of the indicators. The general principles of investing that investors buying and selling behavior is a reflection of the results of various factors, and the prices will ultimately depend on changes in the relationship between supply and demand, while the RSI indicator is currently under the principle of balance between supply and demand, by measuring a certain period, the overall rate of price rise stock changes accounted for the total percentage of the average range to assess the strength of long-short power level of a specific operation and then prompts. The application of RSI on the surface more complicated law, including cross, numerical, form, and departure from the principles and other aspects of the judgments, but because of RSI include virtually all the commonly used indicators to determine methods, therefore, if investors fully grasp the application of laws of RSI will contribute to the understanding of other technical indicators and applications.
With regard to the use of RSI, first of all is to observe two or more different parameters of the relationship between the location of curve RSI curves of different parameters to use exactly the same as the laws of moving average parameter smaller short-term RSI curve in the parameter, if a larger long-term RSI curves above, it is a bull market is currently Quotes; On the contrary, for the bear market. As the parameters of the RSI calculated on a larger time frame larger, so the conclusions will be more reliable. However, as with the moving average system can not avoid the shortcomings of slow response, which is in the process of using it should be noted.
Second, the value is based on the size of the RSI to determine the operational direction RSI value between 0 and 100 is divided into from the "very weak", "weak," "strong" to "extreme" four areas. "Strong" and "weak" to 50 as a dividing line, but "very weak" and "weak" as well as between "strong" and "strong" the boundaries between the parameters will have to change with the change in RSI. Different parameters, its regional division is different. In general, parameters the larger the line from the center line of 50 more near, more distant from the l00 and 0. But most should fall within the range 15,30 to 70,85. If the RSI values of more than 50, indicating strong market access city may consider buying, but if you continue to enter the "strong" area, we must consider the extremes meet in preparation for sold. Similarly RSI values below 50, too, if they go into a "very weak" area, then oversold, we should wait for an opportunity to buy.
Thirdly, it is right RSI morphological analysis of the curves when the RSI curve in high areas or low areas to form a head-shoulder-shaped or multiple top (bottom) of the form, you can consider the sale of operations. The location of these patterns appear farther away from the axis 50, the signal of the credibility of the higher error less likely. For the K-line morphological analysis of all conventional methods, the analysis of the RSI curves are applicable. For example, in K-line diagram of the same trend line can be used in the RSI. RSI curve rise and fall in the high and low points arising from the trend line can be connected, this trend line also plays a role of support and pressure lines, once a breakthrough, it can refer to the K-line methods of analysis to determine whether the trend of pre - end.
Finally, there is departure from the RSI and the stock price to determine the Quotes area. RSI judged in a variety of methods, with the departure from the RSI and stock price to determine the most reliable Quotes. The course of the stock continued higher, if the RSI is high, but did not follow the stock to form a higher than a high point, which indicates that stock Zhangsheng may have entered the final stage, this time the top there is a relatively clear departure from the sale out the signal. In contrast with this is the end of departure. The slow emergence of the low RSI climbed, although the price is still declining, but the RSI is no longer new lows, when that decline coming to an end, could be considered an appropriate time to Jiancang.
