RSI- commonly used to show whether price is overbought or oversold.
General rule:
𝐑𝐒𝐈 > 𝟕𝟎 -- 𝐎𝐯𝐞𝐫𝐛𝐨𝐮𝐠𝐡𝐭
𝐑𝐒𝐈 < 𝟑𝟎 -- 𝐎𝐯𝐞𝐫𝐬𝐨𝐥𝐝
One becomes cautious once price becomes overbought and optimistic when price becomes oversold.
2/16
#RSI is a common indicator which most of us use in the stock market.
This learning thread would be on
"𝙐𝙨𝙚𝙨 𝙤𝙛 𝙍𝙎𝙄"
Like👍 & Retweet🔄 for wider reach and for more such learning thread in the future.
Also, an investment strategy is shared using RSI in the end.
1/16
RSI- commonly used to show whether price is overbought or oversold.
General rule:
𝐑𝐒𝐈 > 𝟕𝟎 -- 𝐎𝐯𝐞𝐫𝐛𝐨𝐮𝐠𝐡𝐭
𝐑𝐒𝐈 < 𝟑𝟎 -- 𝐎𝐯𝐞𝐫𝐬𝐨𝐥𝐝
One becomes cautious once price becomes overbought and optimistic when price becomes oversold.
2/16
1. It was in overbought zone and after a few days when a small dip was seen from 693 to 588 (15% downside)
2. It was in oversold zone and after a few days when a small rally was seen from 59 to 107 (82% upside)
3/16
When a price is in overbought zone and is in momentum, then it can move up without taking a dip and exiting or shorting stock would prove wrong.
When IRCTC was in overbought zone, price went up from 2718 to 6396 (135% rally).
4/16
When a price is in oversold zone and is crashing, then it can move down without taking an upmove and buying stock would prove wrong.
When DHFL was in oversold zone, price went down from 126 to 11 (91% crash).
5/16
If a price is oversold, then wait for the price to turn towards neutral zone and also check on other setup whether support is available or not.
Other setup can be Price Action, Support Lines, Demand Zones, Fibonacci or any indicators.
6/16
Combine multiple setup for high probability trades.
7/16
Another popular use of RSI by the traders.
Two types of Divergence:
1. Bullish Divergence
2. Bearish Divergence
Divergence is used by the traders who like to take contra trade (i.e. trade against the actual trend)
8/16
Condition-
1. Price should form lower lows
2. RSI should form higher lows and in oversold region
Laurus Labs weekly chart- Bullish Divergence.
It went up from 450 to 740 (60% rally)
9/16
Condition-
1. Price should form higher highs
2. RSI should form lower highs and in overbought region
Neuland Labs weekly chart- Bearish Divergence.
It went up from 2725 to 1500 (45% correction)
10/16
Like two bullish divergence in continuation or two bearish divergence in continuation.
This can be high probable trade setup.
One double bearish divergence is shown in the chart below.
11/16
Simple setup for long-term investment.
Setup:
1. Select Fundamentally good companies
2. Use monthly time frame
3. Buy if RSI is above 50 on monthly closing basis
4. Sell if RSI goes below 50 on monthly closing basis.
12/16
Asian Paints Monthly Chart.
Condition got satisfied in 2008 when it was trading at 108 and still after 13 years exit condition is not fulfilled in Asian Paints.
CMP is 2982.
Returns of 2660% times in 13 years or 29% CAGR.
Easy right!
13/16
RSI crossed above 50 in 2012 when it was trading at 18.
And RSI crossed below 50 in 2016 and the exit was at 56.
Returns of 210% in four years which means CAGR of 33%.
14/16
More from Yash Mehta
Option Trading is very difficult to master as there are so many things to understand.
Here is a master thread related that will help a beginner to understand about Options Trading.
A complete course worth Rs 50K for free.
1/ A detailed thread on basics of Option Greeks and how it impacts Options
2/ Basic Option Trading Strategies:
There are many option strategies to trade. But keeping your strategy simple is the key.
In this thread, all the basic option trading strategies are being
3/ What are the things that you should look at before taking any Option
4/ Is Option Selling Possible with Rs 1 Lakh Capital?
Even a beginner can start trading in option selling with capital as low as Rs 1 Lakh.
What are the techniques one can use and how to mitigate the infinite loss risk is shared in this
Here is a master thread related that will help a beginner to understand about Options Trading.
A complete course worth Rs 50K for free.
1/ A detailed thread on basics of Option Greeks and how it impacts Options
There are various Options Greeks like: Delta, Gamma, Vega, Rho, Theta.
— Yash Mehta (@YMehta_) September 4, 2022
A complete guide on how these #Option Greeks impact option price.
2/ Basic Option Trading Strategies:
There are many option strategies to trade. But keeping your strategy simple is the key.
In this thread, all the basic option trading strategies are being
Option trading is tough but here\u2019s what can make it easier for you
— The Chartians (@chartians) September 17, 2022
8 option strategies that you can use in any market (sold as a \u20b9 50,000 course !)
3/ What are the things that you should look at before taking any Option
They say options trading can make YOU BANKRUPT - is it true ?
— The Chartians (@chartians) September 23, 2022
If yes then why ?
A thread on Risk management and Position sizing in options trading (worth 50k\u20b9 course)\U0001f9f5
4/ Is Option Selling Possible with Rs 1 Lakh Capital?
Even a beginner can start trading in option selling with capital as low as Rs 1 Lakh.
What are the techniques one can use and how to mitigate the infinite loss risk is shared in this
101 guide on how you can start option selling to generate active returns with less capital (Rs 1 Lakh) \U0001f9f5:
— Yash Mehta (@YMehta_) August 19, 2022
A course on option selling available for free.
So many free content available on Option trading, still very few are able to trade in options successfully.
Here is a master thread that will help a beginner to learn about Options Trading.
A complete course worth Rs 50K for free 🧵:
1/ Zerodha Varsity: Options Theory for Professional Trading
This book will give you a basic understanding of options works and what all thing impacts
2/ Zerodha Varsity: Option Strategies
This book has covered basic option strategies that a trader can use.
Still if you can't read this books then in the next part, summary of most of these things is
3/ Options Greeks:
A detailed thread on basics of Option Greeks and how it impacts Options
4/ Basic Option Trading Strategies:
There are many option strategies to trade. But keeping your strategy simple is the key.
In this thread, all the basic option trading strategies are being
Here is a master thread that will help a beginner to learn about Options Trading.
A complete course worth Rs 50K for free 🧵:
1/ Zerodha Varsity: Options Theory for Professional Trading
This book will give you a basic understanding of options works and what all thing impacts
2/ Zerodha Varsity: Option Strategies
This book has covered basic option strategies that a trader can use.
Still if you can't read this books then in the next part, summary of most of these things is
3/ Options Greeks:
A detailed thread on basics of Option Greeks and how it impacts Options
There are various Options Greeks like: Delta, Gamma, Vega, Rho, Theta.
— Yash Mehta (@YMehta_) September 4, 2022
A complete guide on how these #Option Greeks impact option price.
4/ Basic Option Trading Strategies:
There are many option strategies to trade. But keeping your strategy simple is the key.
In this thread, all the basic option trading strategies are being
Option trading is tough as there are many strategies based on different market view.
— Yash Mehta (@YMehta_) September 30, 2022
Sharing 6 basic Option Strategies for free that you can use based on different market view (sold as a \u20b9 25,000 course!).
A thread \U0001f9f5:
More from Screeners
History tells us when #USDINR moves it moves a lot. In that context it has been remarkably resilient with just 8% depreciation. It looks like we are very close to the point from where Rupee will start to appreciating again.
BTW Nifty Metal has inverse correlation with USDINR. https://t.co/X6cqVcYF3V
BTW Nifty Metal has inverse correlation with USDINR. https://t.co/X6cqVcYF3V
We know how our stock market has weathered the FII selling.
— Sandeep Kulkarni (@moneyworks4u_fa) June 10, 2022
But the equally big story is how Rupee has weathered $50bn+ outflows since Oct 2021. Hats off to RBI Governor Das & his team for having the vision of building huge reserves in his tenure. pic.twitter.com/CVuF9dM361
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1/ Some initial thoughts on personal moats:
Like company moats, your personal moat should be a competitive advantage that is not only durable—it should also compound over time.
Characteristics of a personal moat below:
2/ Like a company moat, you want to build career capital while you sleep.
As Andrew Chen noted:
3/ You don’t want to build a competitive advantage that is fleeting or that will get commoditized
Things that might get commoditized over time (some longer than
4/ Before the arrival of recorded music, what used to be scarce was the actual music itself — required an in-person artist.
After recorded music, the music itself became abundant and what became scarce was curation, distribution, and self space.
5/ Similarly, in careers, what used to be (more) scarce were things like ideas, money, and exclusive relationships.
In the internet economy, what has become scarce are things like specific knowledge, rare & valuable skills, and great reputations.
Like company moats, your personal moat should be a competitive advantage that is not only durable—it should also compound over time.
Characteristics of a personal moat below:
I'm increasingly interested in the idea of "personal moats" in the context of careers.
— Erik Torenberg (@eriktorenberg) November 22, 2018
Moats should be:
- Hard to learn and hard to do (but perhaps easier for you)
- Skills that are rare and valuable
- Legible
- Compounding over time
- Unique to your own talents & interests https://t.co/bB3k1YcH5b
2/ Like a company moat, you want to build career capital while you sleep.
As Andrew Chen noted:
People talk about \u201cpassive income\u201d a lot but not about \u201cpassive social capital\u201d or \u201cpassive networking\u201d or \u201cpassive knowledge gaining\u201d but that\u2019s what you can architect if you have a thing and it grows over time without intensive constant effort to sustain it
— Andrew Chen (@andrewchen) November 22, 2018
3/ You don’t want to build a competitive advantage that is fleeting or that will get commoditized
Things that might get commoditized over time (some longer than
Things that look like moats but likely aren\u2019t or may fade:
— Erik Torenberg (@eriktorenberg) November 22, 2018
- Proprietary networks
- Being something other than one of the best at any tournament style-game
- Many "awards"
- Twitter followers or general reach without "respect"
- Anything that depends on information asymmetry https://t.co/abjxesVIh9
4/ Before the arrival of recorded music, what used to be scarce was the actual music itself — required an in-person artist.
After recorded music, the music itself became abundant and what became scarce was curation, distribution, and self space.
5/ Similarly, in careers, what used to be (more) scarce were things like ideas, money, and exclusive relationships.
In the internet economy, what has become scarce are things like specific knowledge, rare & valuable skills, and great reputations.
The Eye of Horus. 1/*
I believe that @ripple_crippler and @looP_rM311_7211 are the same person. I know, nobody believes that. 2/*
Today I want to prove that Mr Pool smile faces mean XRP and price increase. In Ripple_Crippler, previous to Mr Pool existence, smile faces were frequent. They were very similar to the ones Mr Pool posts. The eyes also were usually a couple of "x", in fact, XRP logo. 3/*
The smile XRP-eyed face also appears related to the Moon. XRP going to the Moon. 4/*
And smile XRP-eyed faces also appear related to Egypt. In particular, to the Eye of Horus. https://t.co/i4rRzuQ0gZ 5/*
I believe that @ripple_crippler and @looP_rM311_7211 are the same person. I know, nobody believes that. 2/*
Today I want to prove that Mr Pool smile faces mean XRP and price increase. In Ripple_Crippler, previous to Mr Pool existence, smile faces were frequent. They were very similar to the ones Mr Pool posts. The eyes also were usually a couple of "x", in fact, XRP logo. 3/*
The smile XRP-eyed face also appears related to the Moon. XRP going to the Moon. 4/*
And smile XRP-eyed faces also appear related to Egypt. In particular, to the Eye of Horus. https://t.co/i4rRzuQ0gZ 5/*