COMPONENTS & STRATEGIES

RSI, Levels and Divergences
Relative Strength Index (RSI) & Levels

The Relative Strength Index (RSI) is a momentum indicator oscillating between 0 and 100, helping to identify market trends and potential reversal points. An RSI below 30 indicates an oversold market, possibly a buying opportunity, while above 70 signals an overbought market, hinting at a selling opportunity. The 50 level on the RSI is a critical threshold to watch. The 50 level on the RSI marks a potential change in market character. Crossing above 50 signals a bullish shift, while dropping below indicates a bearish trend, aiding in strategic trading decisions.

DIVERGENCES

RSI divergences occur when the price of an asset and the RSI trend in opposite directions. This can signal a potential reversal in the market trend. A Bullish Divergence happens when the price reaches a Lower Low while RSI makes a Higher Low. Conversely, a Bearish Divergence is noted when the price records a Higher High, but RSI achieves a Lower High, indicating a potential downward trend.

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SWING Momentum
SWING MOVING AVERAGE, Bearish/Bullish Swings & COLOR FLIP

A moving average applied to the RSI creates a Swing Momentum Indicator, signaling potential bullish (crossing above) or bearish (crossing below) market swings, aiding in more precise trading decisions. Utilize the Swings during bullish/bearish phases for better results. The Blue/Purple Colors on the moving average indicate whether it's moving up or down.

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Volatility Line
Volatility Line, Exhaustion Areas and Volatility Echo

The Volatility Line is a technical indicator oscillating between 0-100, helping to gauge market volatility. When the line moves up - the volatility is increasing and viceversa. The 0-15 range indicates exhaustion areas where volatility is likely to increase, while the 85-100 range signals an exhaustion area where volatility is likely to slow down.
The Volatility Echo Line can also be used to determine high/low volatility when the Volatility Line crosses above/below it.

Bearish/Bullish Corrections & Impulses

The Colors on the Volatility Line distinguish market dynamics concisely: Green is high volatility bullish impulses, red for bearish impulses, blue for low volatility bullish corrections, and purple for bearish corrections, making it easier to understand the nature of the trade.

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