RSI: Finding the Bottom

RSI (Relative Strength Index) shows how much "strength" bulls and bears have right now.

Reading RSI

• 0–30: oversold (too low, expect rise)
• 30–70: neutral (neither too low nor high)
• 70–100: overbought (too high, expect fall)

Formula: RSI = 100 - (100 / (1 + RS)), where RS = avg gain / avg loss

You don't need to memorize — the bot calculates!

Practical Example

BTC Chart Over a Week:

Day	Price	RSI	Signal
Mon	$40k	50	Neutral
Tue	$38k	25	🔴 Oversold!
Wed	$39k	35	Starting recovery
Thu	$42k	60	Recovering fully
Fri	$44k	75	🟢 Overbought

Conclusion: Tuesday (RSI=25) was ideal DCA buy!

RSI in AI Traders

Setting Filter

1. Create bot (DCA or grid)
2. In Entry Filters choose RSI
3. Set RSI < 30 (buy only at bottom)
4. Confirm

Now bot buys only when RSI below 30.

Typical Values

Conservative entry:

• RSI < 30 (wait for clear bottom)
• Fewer entries, better quality

Normal entry:

• RSI < 40 (more frequent)
• Balance between frequency and quality

Aggressive entry:

• RSI < 50 (almost always buy)
• Many entries, might catch peaks

RSI Period

RSI usually calculated over 14 periods (14 days/hours):

• Fast RSI (7): more sensitive
• Normal RSI (14): standard
• Slow RSI (21): less sensitive

Recommend: start with 14.

Combining RSI With Other Indicators

RSI + EMA (Powerful Combo)

1. Price > EMA(200) — price above long-term trend
2. RSI < 30 — oversold condition
3. Action: buy!

This gives best entries: uptrend + moment of drop.

RSI + Volume

1. RSI < 30
2. Volume > average — confirms selling
3. Action: buy on strong bottom

RSI Mistakes

Mistake 1: Catching Falling Knife

❌ Wrong: RSI < 30, I buy, price drops 30% more ✅ Right: add EMA to confirm trend

Mistake 2: Too Sensitive RSI

❌ Wrong: RSI < 50 (never signals) ✅ Right: RSI < 30 or < 40

Mistake 3: Relying Only on RSI

❌ Wrong: use RSI alone, ignore context ✅ Right: combine with EMA and volume

Visual Example

BTC Price:      $40k ───────── $38k ────── $39k ────── $42k
                      ↓ fall    ↓         ↑           ↑
RSI:           60      30        25       35      60   75
               ↓
           Normal   Oversold  Entry pt Recovery Overbought

Recommendation for Beginners

• Set: RSI < 30
• Period: 14
• Strategy: DCA (buy daily, but only if RSI < 30)
• Expect: filters out 30–50% entries, better quality

This is most reliable filter for beginners!

Learn Next

• MACD — trend following
• Bollinger Bands — volatility
• Volume — market interest

Start with RSI < 30 and in a month you'll be expert!