The M-shaped trend of the RSI index is a common peak pattern in overbought areas.
When both RSI and RSI are at high levels, the exchange rate shows a trend of higher than the wave, while RSI shows a trend of lower than the peak, which is the phenomenon of top deviation of RSI.
The top deviation phenomenon is generally the exchange rate is about to reverse the signal at the high level, indicating that the exchange rate falls in the short term probability is higher, it is a sell signal.
In the actual trend, the top deviation of RSI index refers to the fact that during the continuous rise of exchange rate, the exchange rate first makes a high point at ¢Ù, and the RSI index correspondingly makes a new high point above 80 ¢Û.
Later, after the exchange rate has been adjusted to a certain extent, RSI has also been adjusted along with the exchange rate decline trend.
However, when the exchange rate rises again and surpasses the previous high point to create a new high point ¢Ú¢Ü, the RSI shock wave ¢Ü does not follow the exchange rate through the previous high point ¢Û and then starts to fall, which forms the M-shaped top deviation of RSI index.
When the RSI M – shaped top departure, the exchange rate peak is more likely to fall, is a strong sell signal.
RSI index W – shaped bottom deviation and M – shaped top deviation opposite is W – shaped bottom deviation.
When RSI and exchange rate are both at a low level, exchange rate continues to decline, forming a trend of lower than lower, while RSI shows a trend of higher than the bottom, which is the W-shaped bottom deviation.
W-shaped bottom divergence usually means that the exchange rate is likely to rebound in the short term and is a sign to buy.
(1) Making good use of RSI deviation can overcome the loss caused by the passivation phenomenon of RSI index to a certain extent, but when the deviation fails, do not rush to chase orders.
(2) In the deviation of RSI, the accuracy of M-shaped top deviation is higher than that of W-shaped bottom deviation.
RSI index W – shaped bottom deviation, usually to repeatedly appear several times to confirm the bottom deviation, so should try to choose M – shaped top deviation trading.
(3) Generally speaking, the deviation reference of long cycle time is higher than that of short cycle time.
