When trading using technical analysis, it is important to use a holistic approach. I personally like using indicators as a tool on top of my market structure analysis. The Relative Strength Index is one of the most popular indicators used because it helps explain when a coin is overbought and oversold. Overbought coins are known to sell off while oversold coins are known to have growth potential.
In the video above, I take a look at the popular cryptocurrency Ripple ($XRP). Using the RSI indicator, I was able to pick specific entry points for coins that allowed for easy 5-10% gains. One of the most important parts of using the RSI is being able to do analysis on the calculation itself. I personally draw support and resistance lines on my RSI chart because it gives a great indication of the true turnaround points.
The biggest issue with strictly using indicators is that they do not work perfectly. Use the RSI as a tool within your analysis. Do not use it as your analysis. As always, trade smart and trade without emotions!
