Overbought & Oversold Trading Secrets
60sControversial claim that RSI alone can predict reversals, sparking debate among traders.
▶ Play ClipThis video provides a practical, simplified explanation of the RSI (Relative Strength Index) indicator and how to use it for trading on the Pocket Option platform. The presenter demonstrates entry strategies based on overbought and oversold conditions, using real-time examples on a one-minute timeframe.
The RSI has two key levels: 70 (overbought) and 30 (oversold). The 50 level is less important. When RSI crosses above 70, it indicates overbought conditions; below 30 indicates oversold.
When RSI goes above 70, buyers have pushed too high, leading to a likely price drop as sellers enter. The presenter recommends entering short positions when RSI crosses back below 70.
When RSI falls below 30, sellers have dominated, and buyers are expected to enter, pushing prices up. The best entry is when RSI crosses back above 30 from below.
The optimal entry is when RSI crosses from below 30 to above 30 (oversold to neutral), signaling the start of an upward move. Similarly, for overbought, enter when RSI crosses from above 70 to below 70.
The presenter enters a $100 one-minute bullish trade after RSI crosses above 30 from oversold. The trade becomes profitable, earning 92% return, demonstrating the strategy's effectiveness.
The RSI indicator is a powerful tool for understanding market momentum and identifying potential reversals. By waiting for clear crossover signals at overbought and oversold levels, traders can make informed entries with higher probability of success.
"Title promises an effective strategy revealing opportunities, and the video delivers a clear RSI-based method with live examples."
What are the two key levels of the RSI indicator?
70 (overbought) and 30 (oversold).
01:08
What does it mean when RSI crosses above 70?
Overbought condition; buyers have pushed too high, and a price drop is likely.
01:52
What is the best entry point for a bullish trade using RSI?
When RSI crosses from below 30 to above 30 (oversold to neutral).
03:37
What is the best entry point for a bearish trade using RSI?
When RSI crosses from above 70 to below 70 (overbought to neutral).
04:42
What timeframe was used in the live trade example?
One-minute timeframe.
05:40
What was the profit percentage on the $100 trade demonstrated?
92%.
06:40
Overbought Leads to Drop
Clearly explains the logic behind overbought conditions and the expected market reaction.
01:52Optimal Entry Timing
Provides a specific, actionable rule for entering trades based on RSI crossover.
03:37Live Trade Success
Demonstrates the strategy in real-time with a profitable outcome, validating the approach.
05:40[00:02] explore the world of trading in a practical and simplified way. I'll share powerful explanations and strategies with you. We'll also have a daily trading session where we'll try out different strategies and indicators to help us achieve the best results. Every week, I
[00:15] create explanations and live streams to explain the methods I use in my trading. So, don't forget to subscribe to the channel below to receive these explanations and live streams so you can participate in trading with us. Also, be sure to join
[00:27] our Telegram channel; the link is below the video. You'll find a trading signal there that will help you trade better and better. So, we've introduced ourselves, so let's get started with this video. In this video, I'll try to explain and simplify one
[00:40] of the most well-known indicators in the trading world: the RSI indicator. Many people know its name but don't know what to do with it or how to use it in their trading. Today I'm going to explain how to use it, how to understand what it does exactly, and then
[00:55] we'll try to look at one or two previous examples to see the results we can get from a single indicator. We're not going to trade with it all the time, just to show you that with just one indicator, if you understand, you'll definitely develop a strategy or make strong trades. So,
[01:08] let's go directly to the Pocket Option platform, the link to which is below the video. After you access it, we'll go to the indicators. Here you'll find the Relative Strength Index ( RSI). Notice that it has two levels: the 70 level and the 30 level. The 50 level in between is
[01:23] n't very important for us. So, imagine the 70 level as the buying level and the 30 level as the selling level. When buyers reach this level, which is the 70 level, let me draw it for you better so that everything is clear. As you can see, I've tried to draw
[01:37] the levels exactly, which are the 70 and 30 levels. So, as you can see, the RSI line is moving between them. If it goes above the 70 line, then we have overbought conditions. Buyers have been buying and buying and buying, and then they reached this level, which is the 70 level, the
[01:52] level at which they should stop buying because there's an overbought condition. Many buyers enter when this movement happens, so we will definitely enter, meaning we will enter, meaning we will enter, in short positions, because buyers will decrease and sellers will increase, so there will definitely be a drop in the market, and we will see a
[02:06] drop immediately. I will show you in the examples, then the drop happened. The RSI moved like this and like drop happened. The RSI moved like this and like this, then it reached the 30 level and went below it. So, if it went below it, then we definitely reached what we reached: oversold conditions. There are many sellers
[02:20] in the market, so they sold and sold and sold, and they were satisfied at that percentage. So, what will happen after that? Buyers will enter and they will push the market upwards. So, at this point, we definitely have oversold conditions. Selling and buying mean buyers are entering the market because the price will be
[02:35] very low. That's why buyers will enter the market, and that's why we see an immediate rise, followed by overbought conditions. Then sellers start entering, then we see oversold conditions, and then buyers enter, and sellers start entering, then we see oversold conditions, and then buyers enter, and
[02:50] market. Look at this example: as we can see, the market was falling, falling, falling, as we're seeing. At the same time, we see the RSI falling, reaching the 30 level, but it didn't break through from above. It continued down, then we saw it rise a little,
[03:06] then go back down. As you can see, when it broke through and went below it, we definitely have oversold conditions. And after that, we'll definitely have broke through and went below it, we definitely have oversold conditions. And after that, we'll definitely have oversold conditions, we see buyers. At this point of oversold conditions, we
[03:21] immediately see difficulty in the market. So, you'll definitely get a question Where do I enter these trades? I mean, where do I place them when they cross from top to bottom? Like in this example, when they cross the 30 line, or when they were below the 30 line, or when they cross from bottom to top, meaning they cross like this and there's definitely an upward movement. So, the
[03:37] third option is the best option because if you look here, when the crossover happened from bottom to top, it was below the 30 line and then went back above it because buyers entered the market. And at this point, we saw this candle, and we saw this candle when it was below the 30 line. Of course, we were still in a
[03:52] downward trend. So, if we want to enter against the market, we have to wait for the REI to return above the 30 line or when it crosses above it, and then enter directly with the rising market. And if you look, immediately after the oversold, we went up until we reached almost the 70 line.
[04:09] Of course, we didn't cross because there was no overbought condition. Rather, the market went back down a little and then went back up, and it continued like this. The market moves between the two levels, which is the level of the 70 and the 30 level below it means oversold, and above it, it's definitely overbought. So we only enter at points that are
[04:25] overbought and oversold. Let's look at another example of overbought conditions and try to enter In our example, we had an upward movement in the market, as you can see. There was also an upward movement in the RSI, and we crossed the 70 line, which is overbought. So, when
[04:42] overbought occurs, sellers will definitely start entering because they see that the price has become too high, and they need to sell to bring the market down a little. That's why we saw that the market immediately went down again. If we enter at this point, the
[04:56] third point, which is when the RSI crosses above the 70 line and then crosses downwards at the point where we enter, then, as you can see, we have this candle and this candle. This candlestick pattern, we're currently analyzing it on a one-minute timeframe. So, the
[05:11] trade duration will be one minute. If we enter within that one minute, we need one candlestick. If we enter on that candlestick, and it wins, then we'll win candlestick, and it wins, then we'll win
[05:25] You're not going to use it to enter trades, but rather to understand future market movements. It's not going to predict the future; it's trying to show you where the market will go in the future. That's all. Let's try entering one or two trades, let's say
[05:40] $100 for one minute. Let's try entering one-minute trades so we don't make this currency, let's enter a bullish trade directly, and I'll explain why. First, we have a crossover; it's with the 30 line from below to above, which is an
[05:53] indicator of what? Why go up? Because it means that after this decline, and as we see in the RSI, the RSI line dropped below the 30 line, which is an indication of oversold conditions. After oversold conditions, we will definitely see buyers enter, which is why they will raise the market. That's why
[06:08] we entered directly. It remains difficult, God willing, everything is clear. I repeat, this indicator is for understanding how the market will move, not just for extracting trades from it. As we can see, we understand how it works, so we can make
[06:24] trades like this one, as you can see. And thank God, so far it's profitable. We entered this trade with $100, and it's one minute long, with about 15 seconds left. It's very simple. We waited for the decline, then we waited for the market to be in oversold condition, and then it started to rise, as you can
[06:40] see. There are five seconds left, and thank God, it's 100% guaranteed to be profitable. This trade has already earned us 92%. The dollar means we entered it simply by understanding a basic indicator. We placed $100 and made a profit of $92 because the currency's current value is $92. But that's not important. What's important is that, thanks to
[06:57] this indicator, we waited for the oversold condition to end so the upward trend could begin immediately. Then we entered the trade, or rather, the candlestick pattern, and the trade was profitable for us right away. This is a clear example of how to use this indicator. Try it in your trading and
[07:12] add it to your strategy. If you're interested in powerful strategies, I recommend joining our Telegram group. I'll leave the link below the video. You'll find powerful strategies there that will help you in your daily trading. Don't forget to like and
[07:24] subscribe to the video so you can receive new and previous videos. I'll be waiting for you there on Telegram so we can trade together. See you in the next video, God willing.
⚡ Saved you 0h 07m reading this? Transcribe any YouTube video for free — no signup needed.