Trade Strategy For Identifying Highs And Lows

The combination of the RSI and Composite Index can create a powerful combination for detecting turns in cryptocurrency markets.

Combining the RSI and Composite Index

The Relative Strength Index is one of the most well known tools in technical analysis. But like any field of study, original theories and ideas change. Tools become improved. The RSI is an excellent example of a tool that has well-known over the decades. As a bounded oscillator, the RSI only measures between 0 and 100. And people still use the default overbought and oversold levels that Welles Wilder developed in 1978. But beyond the standard overbought and oversold levels, the RSI is used extensively to detect a phenomenon known as divergences. Divergences are differences between price action and a corresponding oscillator. A bullish divergence occurs when price is creating lower lows, but the oscillator is forming…