• What is the Relative Strength Index - RSI and how is it calculated?
  

Created by J Welles Wilder in 1978, the RSI is an indicator of the occilator type, this tool will allow us to know the speed with which prices change, overbought and possible sales, in order to make better investment decisions!

• Can we trust the RSI in cryptocurrency trading and why?
  

We can trust 65% in the RSI, it is a very useful tool when trading cryptocurrencies, it helps us to reaffirm our decisions when investing, but this tool should not be used individually, nor as a fundamental pillar to make our decisions , we must use it as a complement in our list of main tools, the problem is that this tool tends to be printed and can generate false measurements, the range of oversold or the range of overbought may be longer in a level and then indicate a possible trend reversal, if we wait for the trend reversal, the RSI is not the best indicator to help us.
for this reason it can never be used as a main tool!

• How is the RSI indicator set on the chart and what does the length parameter mean? Why is it equal to 14 by default? Can we change it? (Screenshot required)
  

the length parameter is marked by default at 14, the number 14 equivalent to 14 price measurement periods of the last 14 days, this can be changed but normally it is left at the number 14 which is its standard number, since it takes the last candles to make the calculation, if we change the parameter by the number 41, for example: the RSI parameter will take the last 41 candles and the calculation will be slower, In addition, the indicator may be in the oversold and overbought area during a long time, while trends are set.

It is recommended to use a standard length of 25 and for short periods a length of 9, changing the overbought and oversold value according to the asset we are working with, because there are assets that quickly reach these values and there are other assets that do not!

• How do you interpret overbought and oversold signals when trading cryptocurrencies? (Screenshot required)
  

• Overbought
  

Overbought occurs when the purchase of the asset exceeds the parameter defined in this case my overbought parameter of 70%, when the value of the asset exceeds that range it is considered overbought, it should be noted that the range is chosen by the trader but if we want it set default range is 70%.

After the value of the crypto exceeds the percentage, in this case between 70% and 100%, a price reversal is presumed, a price drop to be exact!

• Oversold
  

The oversold is generated when the sale of the asset exceeds the defined range. In my case, use a range of 30%, which is the standard parameter for the oversold, this parameter is not fixed, the trader can adjust it to his liking !.

When the value of the crypto is so low that it exceeds the percentage, in this case between 30% and 0%, a price reversal is presumed, a price rise to be exact!

• How do we filter RSI signals to distinguish and recognize true signals from false signals? (Screenshot required)
  
  
  a longer period decreases price fluctuations and gives fewer signals, while a shorter period gives more signals, but they can be false, You can stipulate in 80/20 the rsi, this will improve the precision and generate fewer signals, but those signals will be more exact, and we will have less false signals, we can also look at the 1 minute chart and then look at the 5 minute chart to know exactly if you have the same cut and thus invest more safely!
  

• Review the chart of any pair (for example, TRX / USD) and present the various RSI signals. (Screenshot required)
  

Bearish divergence:

In this chart there is a bearish divergence, it is shown when the price reached its maximum value but the rsi shows an overbought, that is, when the price and the rsi go to opposite poles.

on this chart there is a bullish divergence, it is shown when the price falls, but the rsi shows a rise.

This graph shows the oversold in red and the overbought in black.

• Conclution:
  
  The RCI indicator is a powerful tool that allows us to analyze the market before making an investment decision, although it is not entirely accurate, it can be used together with other indicators to have more accuracy in our analytical method, I personally believe that if it is used In a correct way we have an advantage in the market since there are thousands of people doing trading without having any knowledge, the tools make our work easier and to protect our money it is best to use all kinds of tools that help us improve our way of investing.