【Technical Course】From Basics to Practice of RCI! Real trading skills that do not rely on signals

Hello! Welcome to the Technical Course.
This time, we will explain in an easy-to-understand way the oscillator-type indicator“RCI (Rank Correlation Index)”for beginners.

1. What is RCI? (Simple calculation method)

RCI (Rank Correlation Index) is an indicator that calculates how much the ranks of “time” and “price” correlate, measuring the strength of a market trend and how overheated it is (overbought/oversold).

It looks complicated, but basically“As days progress, is the price also rising in order?”is what is being calculated.
If it increases perfectly and continues to rise, it approaches “+100%”; if it keeps falling, it approaches “-100%.” This is a simple mechanism.

2. Basic use of RCI with a single line

First, the basic view is to display only one short-term line (parameter: 9, etc.). RCI focuses on the upper and lower zones of “overbought/oversold.”

• +80% or higher:Overbought zone (beware of a reversal to the downside)
• -80% or lower:Oversold zone (beware of a reversal to the upside)

When RCI sticks to the bottom at -80% or lower and then starts to rebound upward, that is the basic setup for a “buy.”

3. Practical use of RCI with two lines (recommended for beginners!)

Using only one line can lead to more false signals, so for beginnerswe strongly recommend the two-line method (short-term line and long-term line).

【Classic trading steps】

1. Use the long-term line (e.g., 26) to confirm the trend direction
   If the long-term line is rising, it is an “uptrend”; if it is falling, it is a “downtrend.”
2. Use the short-term line (e.g., 9) to find entry timing
   When the long-term line is rising, and the short-term line dips once and then rebounds around “-80%,” that timing is an excellentpullback buying point.

Ride the broad wave, and gauge entry timing with finer waves to improve winning rate.

Why do many traders still fail even when using “RCI”?

Currently, there are many Sinal tools based on RCI sold in the market. However, many traders who purchase them cannot sustain consistent profits.

The main reason is that they rely too much on the signal signals without studying the basic usage and the market backdrop first.

Without understanding the calculation basis of the indicator and “why a signal appeared here and now,” simply following arrows cannot respond to changing market conditions, and funds will eventually be erased. There is no holy grail (a magic tool that always wins).