Quick glance: In our last tutorial analysis, we discussed RSI Divergences. In this tutorial, we discuss the difference between a fast and slow moving RSI and how to effectively use this in crypto-trading.
First let us understand what is meant by "lookback" period?
How to use fast and slow moving RSI in trading cryptos
Using fast and slow moving RSI we can place aggressive low risk trades. The key to achieving this is by determining the predominant market trend. In both the charts, we have used the 200 day - SMA to determine the trend.
Price of the underlying > 200day SMA == Predominantly Bullish trend
Price of the underlying < 200day SMA == Predominantly Bearish trend
Buy when:
Price > 200-SMA
2-RSI < 5
Sell when:
Price < 200-SMA
2-RSI > 95
Please note:
One of the most best ways to catch the trades on fast moving RSI could be using algo-trading. It would ensure that accurate signals are not missed!
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Any feedback and suggestions would help in further improving the analysis! If you find the analysis useful, please like and share our ideas with the community. Keep supporting :)
- Mudrex
First let us understand what is meant by "lookback" period?
- Lookback is the period under consideration. For example, typically RSI is calculated on a 14-period consideration.
- 2-period lookback is highly volatile and a 20-period lookback RSI would be smoother than a 14-lookback RSI.
- 2-RSI is a fast moving RSI and 20-RSI is a slow moving RSI.
- Lookback period and timeframe are totally different. In both these charts, we have used a 1-day timeframe.
How to use fast and slow moving RSI in trading cryptos
Using fast and slow moving RSI we can place aggressive low risk trades. The key to achieving this is by determining the predominant market trend. In both the charts, we have used the 200 day - SMA to determine the trend.
Price of the underlying > 200day SMA == Predominantly Bullish trend
Price of the underlying < 200day SMA == Predominantly Bearish trend
Buy when:
Price > 200-SMA
2-RSI < 5
Sell when:
Price < 200-SMA
2-RSI > 95
Please note:
One of the most best ways to catch the trades on fast moving RSI could be using algo-trading. It would ensure that accurate signals are not missed!
-------------------------------------------------------------------------------------------------------------------------------------------------------------------
Any feedback and suggestions would help in further improving the analysis! If you find the analysis useful, please like and share our ideas with the community. Keep supporting :)
- Mudrex
