How to read buy sell signals in RSI indicator

The RSI is a price following indicator, which can vry between the 0-100 value. If the RSI has value over 70 or 80 then it means market price is in overbought zones. and if the RSI has value bellow 30 or 20 then it means market price is in oversold area This indicator is a great oscillator indicator for the detection of high and low levels. RSI indicator also supported the identification of reversal points, in market price. Divergence or differences between price and indicator may indicate an upcoming trend reversal. The RSI indicator is one of the most effective indicators in technical analysis, if it is interpreted correctly. This indicator can lead to extremely rising and falling markets to false signals.

how to read buying or selling signals in RSI

There are three types :
a. signal range at 30/70 or 20/80
signal buy from RSI indicator rose in the neutral zones from the bottom up
signal sell from RSI indicator falls into neutral zone , from top to bottom

b. a change in trend may be imminent, if the RSI indicator has differences to the price chart

support and resistance for RSI indicator should be viewed as the stock it self

RSI formula calculation

RSI = (h/h +n)*100

h = average price increases of the last z trading days
n. average of the price declines of the last x trading days.

RSI indicator is the good indicator, you can have many benefits from this technical analysis. RSI can gives you signals for entry and exit trading, RSI indicator can gives you trend direction of market price like other trend indicator ( moving average indicator, bollinger bands indicator, and etc. ), RSI indicator can determine support and resistance levels in market chart, And the most important is RSI can determine reversal point in the market. There are many derivative indicator from RSI indicator, these custom indicators are : waddah attar rsi level mq4, laguerre rsi indicator, 4 period rsi indicator, MTF multi time frame rsi indicator, macd on rsi indicator, indicator rsi colored, rsi dots, rsi moving average label, all of these custom indicators are modified indicator from RSI indicator

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