Using Stoch RSI

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Using Stochastic RSI within trend while looking for weakness/strength in momentum

●Within an uptrend: If an asset goes back from overbought to oversold without losing any significant horizontal level (support) and/or trend (on the time frame we're focused on) then that's a sign of strength => Expecting trend (up) continuation
●Within a downtrend: If an asset goes back from oversold to overbought without reclaiming any significant horizontal level (resistance) and/or trend (on the time frame we're focused on) then that's a sign of weakness => Expecting trend (down) continuation

Said differently

If market is approaching an horizontal resistance and/or trend (even better in confluence) from below and Stoch RSI is overbought I consider this as a short opportunity.

If market is approaching an horizontal support and/or trend (even better in confluence) from above and Stoch RSI is oversold I consider this as a long opportunity.

If market is within an uptrend, and it goes from overbought to oversold without losing any significant (important) horizontal level and/or trend (even better on confluence) I consider this as a sign of strong momentum within the trend and usually higher risk.

If market is within a downtrend, and it goes from oversold to overbought without reclaiming any significant (important) horizontal level and/or trend (even better on confluence) I consider this as a sign of weakness momentum within the trend and usually use have more confidence in the short side.

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