I just realized that many new traders entering crypto often overlook a quite useful analysis tool, which is RSI. This indicator is actually very simple but helps you identify good entry and exit points if you know how to use it.

RSI stands for Relative Strength Index, and it functions like an oscillator within the range of 0-100. Its operation is not very complicated — when RSI exceeds 70, it signals that the asset is overbought and may decrease in price. Conversely, when RSI drops below 30, it indicates overselling, and a rebound is likely.

In practice, I find that RSI works best when combined with other indicators. Relying solely on RSI can lead to false signals, especially in strong trends. You might see the price continue to rise even when RSI is already at 70. So, the best approach is to use RSI together with MACD or Bollinger Bands to confirm signals.

The calculation of RSI is also quite basic — you take the average gains divided by the average losses over a period (usually 14 candles), then apply it to the formula. But in reality, you don't need to calculate it manually; exchanges like Gate already have RSI available on the chart.

An important tip is to follow the overall trend. In a strong uptrend, RSI can stay above 70 for a long time, so you shouldn't sell just because RSI is high. Similarly, in a downtrend, RSI can stay below 30 for a long time. Always combine this with larger trend analysis.

Thus, RSI is a useful tool to grasp market momentum, but remember it’s only part of a comprehensive trading strategy. I usually use it to confirm signals from other indicators, never rely on it alone. If you have any questions about RSI or how to apply it on Gate, feel free to ask!