Recently, I saw many people in the community asking how to use RSI to truly catch trend reversals. To be honest, RSI is indeed a powerful tool, but most people's methods are too superficial. I’ve compiled an RSI cheat sheet and want to share the most effective techniques I’ve used myself.

First is the overbought and oversold zones. When RSI exceeds 70, the market may experience a pullback; at this point, it's helpful to look at candlestick patterns, especially if bearish patterns appear, which increases confirmation. When RSI drops below 30, it’s a different story—this usually indicates a rebound opportunity. My approach is not only to watch RSI itself but also to look for divergence signals, which can help me catch the bottom earlier.

Divergence is what I use most often. When the price makes a new low but RSI doesn’t follow with a new low, this weak divergence often signals an upward reversal. Conversely, if the price hits a new high but RSI makes a lower high, that’s a sell signal. Learning to identify this pattern is much more reliable than just watching for overbought or oversold levels.

The crossing of the midline (50) is also worth paying attention to. When RSI crosses above 50, it indicates an emerging uptrend, especially when combined with a price breakout above resistance. Crossing below 50 should be approached with caution, as it often signals a downtrend. But there’s a detail: when crossing, you should also check if volume supports the move; otherwise, it could be a false signal.

Another technique I particularly recommend is called a failed swing. When RSI crosses above 70 but doesn’t make a new high and then turns down, that’s a strong sell signal. Conversely, if RSI rises from a low but fails near 50, that’s an opportunity to short. In my live trading, this signal has proven to be quite accurate.

Regarding how to use this RSI cheat sheet, my advice is not to treat it as a magic key. It’s essential to combine it with candlestick patterns, support and resistance levels, and volume analysis. Relying solely on RSI can easily lead to false signals, especially in strong trends where RSI may stay in overbought territory for a long time—chasing in such cases can cost you money.

Currently, I set alerts at RSI levels of 70, 50, and 30 to catch key changes in time. When trading on Gate, I monitor these indicators simultaneously, especially when trading BTC and ETH.

If you’re still worried about catching the bottom or top, try this method. While RSI isn’t a secret weapon, mastering the core techniques of divergence and failed swings can make your trading much more stable. What RSI signals do you use the most? Leave a comment below and let’s discuss together.