The wave's fuel tank (RSI = fuel tank)

Core idea

Each wave is like a car with its own fuel tank. RSI tells you whether that timeframe's tank is freshly full or nearly empty — that is, whether the wave has just started moving or has already gone far and is about to run out of force. This is the first theory the teacher taught in the wave-logic set.

Details

Reading the fuel level

• Full tank / just started: RSI has just crossed the two moving averages (fast MA crosses slow MA) and the two lines are starting to spread apart in the new direction → the wave still has plenty of fuel, still has room to run far.
• Currently running: RSI and the two MAs are spread very wide → the car is running, there's still gas.
• Nearly empty: RSI is starting to contract its distance to the two MAs, the fast MA is contracting toward the slow MA → about to run out of fuel for the current trend → be careful with that trend, don't take a new trade going with it.

Combining it with RSI's sine-wave motion

RSI moves in a sine-wave shape: from the upper edge down to the lower edge and back up again. RSI's position on that sine wave tells you "has it gone far or not":

• RSI has just left the upper edge, just crossed down → there's still a whole stretch of falling road ahead.
• RSI has touched/gotten close to the lower edge, has already gone very far → a pullback wave is coming soon.
• The underlying rule: anything that separates too far from its average value tends to get pulled back toward that average. Price or RSI separating too far from the two MAs will always get pulled back.
  • The teacher's illustration: rice at 15k that shoots up to 50k means (a) most people stop buying because it looks too expensive, (b) the rice-warehouse owner sells off his stock → price returns to near the average (maybe ~25–30k, not necessarily all the way back to exactly 15k).

The Hanoi → Saigon road-trip metaphor

With the same tank of fuel:

• A car driving straight down Highway 1 → reaches Saigon (hits the target).
• A car that keeps reaching Nghe An and turning back to Ha Tinh, reaching Da Nang and turning back to Quang Binh, wandering around for fun → runs out of gas partway there, never reaches the destination, has to turn back to refuel or ends up going even further down.

→ This is exactly the picture of RSI going far while price just idles, wanders back and forth, and never breaks out: the buying/selling pressure isn't real, and the wave won't reach the target zone — it's more likely to turn back to the old level or go even lower.

Three questions the fuel tank can answer

1. Has this wave only just started moving, or has it already gone a long way?
2. Is it about to run out of force and reverse, or does it still have enough force to keep going/continue like the previous wave?
3. On this timeframe, should you take a trade in the direction it's currently running?

How far is "far"?

The teacher answers plainly: this is something you have to build up through experience, there's no hard number. Looking at the position on the sine wave together with RSI's spread against the two MAs, and cross-checking multiple timeframes, you'll gradually learn to estimate it. (There's no quantified threshold yet — the teacher deliberately leaves this for the student to feel out for themselves.)

Putting it into practice

• The first step when analyzing any wave: open up that timeframe and ask "how much fuel is left in the tank."
• Plenty of fuel left → you're allowed to ride along with the market, hold the trade longer.
• Fuel nearly out → don't take a new trade in the same direction, switch to waiting for that timeframe's reversal point/pullback.
• A consequence about timing: even if a smaller timeframe has run out of momentum, a higher timeframe that still has gas won't collapse right away. For example, H4 that has just crossed up: even if the smaller timeframes have no rising momentum, H4 still has to "sway" for at least half a day–a few H4 candles before it sells off → there's still time to exit the trade, no need to rush to close.
• The fuel tanks of two adjacent timeframes tell you who is dragging whom: if the smaller timeframe starts crossing down to correct while the bigger timeframe still has gas → it's just a correction; if the bigger timeframe has already run out of gas and the smaller timeframe is heading down → the smaller timeframe will drag the bigger timeframe down with it.

A quick reading example (2022 sample): 1M was only just in the process of crossing down, not even a quarter of the way through → the long-term downtrend still has years left to run. 1W had already gone very far down toward the lower edge → a weekly pullback wave was coming soon. 3D/4D had just crossed up → only just started, still has gas to go up.

What the teacher stresses / common traps

• RSI trending upward does NOT mean price will rise. This is the crux of it: many times RSI and price go opposite directions, and it's exactly at that divergence point that the real market force shows itself.
• RSI going far while price doesn't break out to match it → buying pressure hasn't clearly come back at all → weak wave.
• The fuel tank is only one of four pillars; it has to be combined with multi-timeframe agreement and the nature of the wave before you make a decision.

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