The use of RSI stock trading Money Tips

Category: Money tips Release Date: 2006-11-07

We may come to the RSI value of an analogy: RSI values are between 0 to 100. This value can be represented in one of the long-short two strengths. Such as RSI = 50 hours, indicating that long-short two strengths are equal, is assumed to be The two sides are 50. When the RSI = 80 hours, indicating that the number of multi-party 80, the empty side of the number 20. Obviously, when RSI = 100 hours, it demonstrates that all people are multi-party person. the stock market on the excitement. can also get RSI = 20 and 0, significance.

Let's analyze this by comparing the number of examples to explain the real meaning of RSI.

Let us start with the limit of RSI = 100 start with: RSI = 100 shows that all are multi-party people. In the stock market knows that this is not possible. If all people are multi-party, that is, all buying stocks people. then who will buy out the shares? no one to sell out of stock, then what sort of stock do? Therefore, we must get someone to sell the stock. who sell stocks? to sell the stock of people, it must be that the current the price is relatively high, and there are likely to decline or have sufficient profits, now do not sell, the future may not be able to sell at this price. people may have the above analysis generated a contradictory point of view. Since the RSI = 100 means that all people are optimistic. then the stock will surely rise. Since the positive about this stock will continue to rise, then why sell it? for this problem we use the data to explain the clear.

If a stock, the present price is 10 yuan, while promising to see more people than bad people, that is willing to buy than those who are willing to sell for a long time, the stock will rise up. Then, the stock on the rise to 11 yuan. the results, or promising to see more people than bad people. stock is still up. For example risen to 12 yuan, 13 yuan, 14 yuan .... 20. At this time, through the rating on the recommendation of introduction from a friend, promising more and more people, more and more ...... stock has been rising to .30 yuan, 40 yuan, 50 yuan ...... 100, Yiankeji once rose to 126.31 yuan. Dear friends, may think that this stock is not will always be up then? Clearly not. no matter how good it is, it will always be time to stop rising.

For example, a stock rose to 10 yuan from 50 yuan, RSI is also close to 100 a. That is, all people are optimistic about when the time comes, will people start to think about selling. Why? Because the hands of the holders of a lot of chips, he would think: If you are not popular enough to start when the ship started to decline if, in the hands of so many chips, you can not distribute out. Thus, even if all of the people think the stock will rise, in these Among those who believe that up, some people have begun to sell stocks. even though he knew that the stock will rise, but the hands of a large number of stocks in order to make the profit can be honored, he must not risen to the top sold before the start. or else His profit on into the foam, come to naught. As a result, many of the stock is expected to be risen to 50, especially the hands of too many chips, he may be 45 million or lower price, they begin to sell the stocks. From this perspective, there must be a lot of people are still bullish, the ready to ship or have shipped.

So, when RSI = 100 indicates that all of the people are optimistic about the stock. More to ship a major crisis lurking. Like a balloon, eat the biggest, the bursting of the crisis also arose. Once you start down this Everyone's favorite stocks, it will produce [Fei Liu Mashimo 3000 feet, down suspected Galaxy nine days] landscape. because of the experience of many times the stock market has made the vast majority of people understand this truth, even if do not understand this reason of the investors, how much will be eaten too late to sell the bug. Therefore, when a callback at a high level when the stock has been profitable people will hurry to sell, making a profit off the bag for security. do not go chasing a high profit people, more buoyant as long as the mind will quickly flesh out, go ahead faster.

From another point of view, when everyone optimistic about a stock, that is, RSI is close to 100, this stock price is often far greater than the actual value of the stock. In that case, what we usually say overbought situation. The so-called overbought situation in which people buy buy buy the stock should not be. Therefore, in the ultra-bought, once dropped, because this stock is not worth the price had decreased by is not surprising.

RSI = 100 describes the situation, come talk about RSI = 80 or close to a high of 80 the situation is easier to understand.

As mentioned earlier, when the RSI = 100, it was started before shipped. Well, this before when? If solely from the point of view of RSI, as a shareholders, since we know RSI = 100 will be too late to sell I why in the RSI = 95 when it began to sell? The Sure. However, if you have summed up most of this experience, all in the RSI = 95 hours, then who will buy it? buy fewer people so, you can guarantee that your shares will be able to sell when the RSI = 95 do? So, it was just the beginning when RSI = 90 sold. this is similar to more and more people will start to sell in advance. That is General books often say the RSI = 80, they were prepared to sell the truth. contrary to reason, RSI = 20, we also prepared a good time to buy.

Said that the above reasoning, and then come back to show the real meaning of RSI, it is easy to master RSI in different values of the different stocks.

There are two kinds of stocks at other is large. On large capitalization stocks and small-cap stocks. The use of RSI stock trading, you can not use the same values. For the large capitalization stocks, when you sell, RSI = 80 should be shipped, we can Maanshan Iron and Steel in this super tape can be clearly seen. This is because plate making it very difficult to achieve for 80% of the people are optimistic. and the number of people holding more people missing, along with chip makers and more ship is difficult to be shipped in advance. This is the RSI large-cap stocks in general the situation does not appear very high. In contrast, small-cap stocks is different, generally in the RSI = 80 hours, it is a good time to purchase. Note have been collected Makers enough chips. tray less, RSI's value higher, mainly a bargaining chip to be controlled, downward pressure, it is difficult to stop making behavior. such as the Rainbow Holdings, connecting more than 20 days rising, RSI up to 99.98%. That is completely controlled by the dealer.

All in all, RSI can clearly tell you were optimistic and look at the number of bad comparison. As this ratio, then the disk for each stock and the different circumstances, its meaning is different. Water can carry a boat can also capsize. the specific use of the resourcefulness of the.