RSI Energies Trading Strategies

• RSI Overbought and Oversold Levels
• Relative Strength Index Divergence Setups
• RSI Classic Bullish and Bearish Divergence
• RSI Hidden Bullish and Bearish Divergence
• Swing Failure Strategy
• RSI Energies Trading Chart Patterns Energies Trend Lines
• RSI Summary

Relative Strength Index Indicator Strategy

Relative Strength Index or RSI is one of the most popular energies indicator used in energies trading. It is an oscillator energies indicator which oscillates between 0 -100. This a energies trend following energies indicator. It indicates the strength of the energies trend, values above 50 indicate a bullish energies trend while values below 50 indicate bearish Energies trend.

RSI Energies Technical Indicator Measures Momentum of a Energies Trend.

The center-line for the RSI is 50 energies indicator, crossover of the center-line indicate shifts from bullish to bearish energies trend and vice versa.

Above 50, the buyers have greater momentum than the sellers and energies price on the energies chart will keep going up as long as this RSI indicator stays above 50.

Below 50, the sellers have greater momentum than the buyers and energies price on the energies chart will keep going downwards as long as RSI indicator stays below 50.

RSI Energies Indicator - How to Trade Energies Trading with RSI Energies Trading Technical Indicator

In the energies example above, when the energies indicator is below 50, the energies price kept moving in a downward trend. The energies price continues to move down as long as RSI indicator was below 50. When the RSI indicator moved above 50 it showed that the momentum had changed from sell to buy and that the downward energies trend had ended.

When the RSI indicator moved to above 50 the energies price started to move upwards and the energies trend changed from bearish to bullish. The energies chart price continued to move upwards and the RSI indicator remained above 50 afterwards.

From the energies example above, when the energies trend was bullish sometimes the RSI would turn downwards but it would not go below 50, this shows that these temporary moves are just retracements because during all these time the energies price trend was generally upwards. As long as RSI indicator does not move to below 50 the current energies trend remains intact. This is the reason the 50 center line mark is used to demarcate the signal between bullish and bearish energies trade signals.

The RSI technical indicator uses 14 day period as the default period, this is the period recommended by J Welles Wilders when he introduced it. Other oftenly used periods used by Energies traders are the 9 and 25 day moving average.

The RSI technical indicator period used depends on the energies chart timeframe you are using to trade, if you are using day energies chart timeframe the 14 period will represent 14 days, while if you use 1 hour energies chart timeframe the 14 period will represent 14 hours. For our energies example we shall use 14 day moving average, but for your trading you can substitute the day period with the chart timeframe you are energies with.

To Calculate RSI Energies Trading Indicator:

• The number of days that a energies market is up is compared to the number of days that the energies market is down in a given time period.
• The numerator in the basic formula is an average of all the energies sessions that finished with an upward energies price change.
• The denominator is an average of all the down energies sessions closes for that period.
• The average for the down days are calculated as absolute numbers.
• The Initial RSI is then turned into an oscillator.

Sometimes very large up or down movement in energies price in a single energies session energies price period may skew the calculation of the RSI average and produce a false energies signal - whipsaw energies signal - in the form of a spike.

RSI Center-line: The center-line for this energies indicator is 50. A value above 50 implies that the energies market energies trend is in a bullish phase as average gains are greater than average losses. Values below 50 indicate a bearish phase in the energies market energies prices are generally closing lower than where they opened.

Overbought and Oversold Levels: Wilder set the RSI overbought and oversold levels at which the energies market moves are overextended at 70 and 30.