Relative Strength Index (RSI) Scanner

Find high probability trades by spotting cryptos that have been overbought or oversold

Watch this video to see how ProfitFarmers’ RSI Scanner is used to help predict price action!

What Is ProfitFarmers’ RSI Scanner?

Knowing how to quickly spot potentially profitable trade opportunities is a MUST if you want long-term success with trading.

Less time chart-staring, more time actually trading. That’s the goal!

The RSI Scanner is a great way to help yourself find high-probability price action much more easily using little time and without the need to switch between countless charts and have years of experience.

In short, the scanner processes RSI oscillations (readings) from 8 different timeframes for over 300 coin pairs on Binance.com to highlight trending pairs that could be played for a profit.

The Relative Strength Index (RSI) is one of the most popular technical indicators used by traders for predicting price action.

This tool uses mathematical analysis to visually represent market movements, which makes it easier to spot good price trends.

This indicator can identify when an asset is ‘overbought’ or ‘oversold’, allowing traders to take advantage of the trend before the market corrects itself.

By using the RSI, traders are more likely to get a better entry, which makes it an invaluable tool for trading cryptocurrency.

Relative strength index scanner
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How to find profitable trades with the RSI Scanner

You can find interesting trade opportunities quicker than ever before, and it’s actually quite straight forward.

To use the RSI scanner effectively, you need to understand the two key concepts: Overbought and Oversold

Overbought

Overbought means that the price trend may be entering a cool-off period (the price may pullback)

The higher the RSI goes above 70.00, the more overbought the asset is… and the more likely that the price could go down.

In ProfitFarmers’ RSI scanner tool, overbought coins are highlighted in “blue”

Example of how overbought coins are displayed:

RSI Overbought blue

Oversold

The RSI can also signal when the plummeting price may reach exhaustion by returning an “oversold” value. The lower the RSI goes below 30, the more oversold the asset is and the more likely it’ll reverse in price.

In ProfitFarmers’ RSI scanner tool, overbought assets are highlighted in “red”

Example of how oversold coins are displayed:

RSI Oversold red

How Overbought and Oversold Looks on a Chart

Overbought and oversold are very good indicators that a pullback or reversal may be in place. This doesn’t mean that you should use this as the only basis for all of your trading decisions but do recognise its importance.

This is how RSI is represented on a chart (Below the MTLUSDT candlestick chart):

RSI Overbought and Oversold plotted on chart

When MTL’s RSI breached above 70.00, it was overbought and saw a pullback (price went down).

Later on, when the coin reached well into oversold territory (below 30.00), a reversal (price went back up) occurred.

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Divergence

This may be the most valuable part of RSI. Divergence occurs when the price momentum is different from the RSI trend. There are 6 divergence types:

Bullish Standard (Price = Lower Lows, RSI = Higher Lows)

When you’re looking at bullish trends, you’re always looking at the lows (orange line). Between price action and indicator, you are always looking at what it is doing to the lows.

With OAXBTC chart shows that the price was making a lower low (went from the low price to an even lower price) while the RSI shows higher lows (the price went from low to high).

This suggests that the price may be due for a trend reversal within the next hour or so as shown in the example.

Hidden Bullish (Price = Higher Lows, RSI = Lower Lows)

If the price is going to a higher low while the RSI is pointing towards a lower low, this indicates that the bullish trend may continue (as seen in the chart above).

Bearish Standard (Price = Higher Highs, RSI = Lower Highs)

Contrary to bullish trends, you look at the highs when you’re checking out bearish trends.

In the ETHUSDT chart example provided, we can see that the price was in an upward trend while the RSI is trending downwards. This indicates that the price may be about to go down.

Hidden Bearish (Price = Lower Highs, RSI = Higher Highs)

In the XRPUST chart above, we can see that the price was pointing towards lower highs while the RSI was moving towards higher highs.

This suggests that the bearish price trend will continue.

Exaggerated Bullish (Price = Double Bottom, RSI = Higher Low)

Then the price of the lows lay flat (double bottom) and the RSI shows higher lows, then the price may likely move into an uptrend.

Exaggerated Bearish (Price = Double Top, RSI = Lower High)

When the price of the highs lay flat (double top) and the RSI shows lower highs, you may see the price trend move downward

IMPORTANT: RSI divergence is a powerful trend indicator but you must set your expectations based on the time frame you chose. 

For example, if you found divergence using the 1-hour chart then expect that the trend may appear within the next few hours.

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How to use ProfitFarmers’ RSI scanner?

  1. Coin Pair – The given coin pair
  2. Time Frames – The 8 different time frames. M stands for minute, H for hour, and D for Day. M5 stands for 5 minutes, H1 stands for 1 hour, and so on.
  3. Price – Current price of the coin
  4. Volume – How many coins are in circulation.
  5. D7 Move – Price movement in 7 days
  6. Live Fibo – Fibonacci retracement levels at the chosen time
  7. Fibonacci calculation period – Time frame of the Fibonacci retracement
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Confluence with the Price Action Scanner

As previously mentioned, the overbought and oversold shouldn’t be your only basis for thinking that a trade looks interesting. You can confirm the trend if you check the Price Action Scanner (PAS).

The PAS lets you know about the Price Action Trend. If you find that the RSI and Price Action of a particular pair coincide, it may be a good idea to pull up its chart and confirm it.

This will save you a lot of time because you’ll be able to easily identify trades that offer potentially profitable opportunities.

Here’s an example of Confluence:

RSI Confluence
On the RSI scanner, DENTUSDT is oversold on the 5, 15, 30-minute and 1-hour time frame.
RSI PAS Confluence
When we look up DENT on the PAS, we can see that there’s a little bit of a pullback but the price is trending up so it may be interesting to buy DENT on dips.

It might be worth it to pull up the chart and see if you can make a trade:

In this example, we saw that there was a pullback and that forms our support. You can set your stop-loss a little below the support level, buy the dips, and sell when the price goes up.

Here’s a look at the DENTUSDT chart three days later:

As you can see, the price dipped down a bit then quickly skyrocketed in price!

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Quickly see what coins are trending up in price but sitting in Overbought territory

RSI quickly see overbought

Using the RSI scanner, we can quickly see which assets have been overbought. In the image above we can see the BNTBTC trade has been overbought across time frames except for M5.

If we go to the BNTBTC 15 minute chart:

This indicates that there may be a trend reversal coming and it may be best to adjust your trades in anticipation of the pullback.

Here’s the same chart 3 hours later:

As you can see, the price pulled back.

Quick scalping and swing trades with trend plays on lower time frames

If you’re looking to make short term trades, consider looking at the RSI Scanner’s 5, 15, and 30-minute time frames.

Here’s an example:

RSI quickly see oversold

We can see that the OAXBTC has been oversold in the 5 and 15-minute time frame.

Those looking to scalp may be interested in buying OAX at this moment because there’s a good chance that a reversal is coming.

You can confirm this by looking at the Price Action Scanner (PAS) and the chart:

RSI confirm in PAS

OAXBTC is looking bullish (green) on the PAS so it would be interesting to jump into a trade expecting that the price will go up.

When we pull up the chart, it confirms that the price is indeed trending upwards.

You can use this strategy if you’re planning to trade coins with leverage. Find some coins that may be trending up and do a quick scalp.

For example, if you took a position and made a 3% gain but you traded at 10x leverage, then you’ve got a 30% gain overall.

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Live example

Here’s how you can use our RSI scanner and PAS to identify interesting trades.

Step 1: Sort it by time frame

In this example, we selected the daily timeframe to sort it from overbought to oversold.

Step 2: Check the D7 Move and Live Fibo

RSI step 2

D7 shows what happened within the last seven (7) days of trading and shows how much the price retraced or pulled back. The Live Fibo shows the current retracement level.

Step 3: Look for coin pairs that have made drastic moves on the D7 and above 25%-50% on the Live Fibo

RSI step 3

In this example, we can see that ZRXUSDT moved 100.3 % within the last 7 days (D7) and its current retrace level is at 49.58% (Live Fibo).

At this point, you may want to check the Price Action Scanner for confluence.

Step 4: Check the Price Action Scanner (PAS) for Confluence

RSI step 4

The PAS suggests that there may be a downward trend on almost all time frames with small upticks on the 5 minute time frame.

At this point, we’ve confirmed through the RSI that the coin is overbought and the PAS is suggesting that the price may pull back soon!

It could be worth pulling up the ZRXUSDT chart to see if there are any interesting trends or divergence.

Step 5: Pull up the chart and check for Divergence

We can see from the chart that it formed a Bearish Standard Divergence.

The RSI, PAS, and Divergence all suggest that the price may pull back so it may be best to adjust your trades in anticipation of the bearish trend.

Here are the results after a few days:

As we can see, the price did indeed pull back.

Now you have a better understanding of how to spot interesting trades using the RSI Scanner and PAS!

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In summary

Please be reminded that we do not offer financial advice and we highly recommend that you do your own research.

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