How to be profitable with RSI trading bot?
The RSI trading bot uses the RSI (Relative Strength Index) to trade. RSI is one of the most commonly used indicators in the world of stock market. Even someone who is just getting started in the world of trading has come across it in countless places, be it a paid course or a YouTube analysis.
For many decades, the RSI was considered one of the best indicators of the market and countless different strategies were created around it. It is a measure that compares price rises to falls over a period of time, so the speed of change in the RSI is essentially the same as the speed of change in market prices.
This indicator is quite simple to understand, but at the same time it holds quite a lot of depth, so it is used by a lot of traders from beginners to professionals. And with our system, you can even use it yourself to automatically trade cryptocurrency by setting up a trading bot and even generate a passive source of income.
How was RSI developed?
The Relative Strength Index was created by a trader named J. Welles Wilder. Wilder started his career as a mechanical engineer, then a real estate agent, and finally a commodities trader.
He was not particularly fond of trading people who brought emotion to the job in addition to purely rational decisions. He himself used technical analysis to exclude emotions from various decisions. And he developed the RSI indicator to facilitate this method, first mentioning it in his 1978 book.
Since then, the indicator he developed has become quite popular, so much so that it has been used for other techniques and is the basis for the RSI trading bot.
How can RSI be used?
The RSI indicator is designed to indicate market sentiment on a scale between zero and 100. Those who monitor this index typically pay particular attention to two values. One is the 30 level and the other is the 70 level.
The 30 level typically indicates that an asset is oversold, whether it is a security or a cryptocurrency. At this point, we would expect to see a strengthening on the buy side and a parallel decrease in the number of sells. Accordingly, this is the level at or above which the price of the asset will start to rise. Thus, if the RSI indicator is at or slightly above the 30 level, it can be perceived as a buy opportunity.
A level of 30 is the opposite of the 70 level, to the point that it indicates an overbought position for the asset. Typically at this level or above, the number of buys decreases while the number of sells increases. If this occurs, it will bring about a decline in the exchange rate.
If you would like to read similar ideas and tips from the world of crypto trading, you may want to read other articles on our blog.
The RSI trading bot is reliable: for strong trends
Although the RSI indicator is considered one of the most useful in creating trading strategies, it is important to note that it is only reliable in strong trends and not in sideways. It shows how prices are moving and when a change is expected.
In case you are interested in trading and would like to automate it with a trading bot or just have questions, feel free to contact us and we will be happy to help!