The RSI: My Secret Weapon in Crypto Chaos

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When I started trading in the crypto world, I was lost among charts and numbers. Until I discovered the RSI. And damn, what a difference it made in my trading!

The RSI (Relative Strength Index) is not just another technical indicator. It's like having a sixth sense for the market. It was developed by J. Welles Wilder in the 70s, a guy who went from real estate to trading with 100,000 reais in his pocket. What a move.

How the hell does this wonder work? It measures price movements over 14 periods (days, hours, whatever you use) and places them on a scale of 0 to 100. Simple but lethal.

What I love is how it detects when the market is overextended. Below 30? Probably oversold, time to buy. Above 70? Overbought, time to sell before everyone else. Although sometimes I adjust these levels to 20 and 80 to avoid false alarms that have cost me good money.

Divergences are where this indicator really shines. When the price falls but the RSI rises (bullish divergence), it is a sign that something big is brewing. The opposite happens with bearish divergences - it seems like everything is fine, but the momentum is dying.

Beware of strong trends: the RSI can give false signals. I learned this the hard way when Bitcoin was crashing and I kept buying on "bullish divergences." What a disaster!

The truth is that no indicator is perfect. The RSI alone is not enough - it's like going to war with a knife. It needs to be combined with other indicators, experience, and frankly, a bit of instinct.

The next time you see a digital asset in free fall with an RSI below 30, think twice. It could be your golden opportunity... or a deadly trap.

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