RSI Indicator

Discussion in 'For novice traders' started by Tengkorakfx, Sep 23, 2017.

  1. Tengkorakfx

    Tengkorakfx Member

    The Relative Strength Index, often referred to as RSI, is more or less similar to the stochastic indicator. This is because it is also possible for traders to measure the saturation condition of buyers and sellers in the currency market.

    The RSI is also marked from 0 to 100 and when the RSI is above the 70 mark, it indicates that the price of the currency pair is experiencing overbought; thus, a downward reversal will take over. Conversely, when the RSI is below the 30 mark, it indicates that the price of the currency pair is oversold; Therefore, traders should anticipate an upside reversal.
     
  2. andengireng

    andengireng Member

    If we are trading using RSI, the entry point is:

    - Buy when market oversold and appear reversal type candle like hammer, inverted hammer or candle piercing.

    - Sell when the market is overbought with the emergence of candle type reversal like Shooting star, hanging man and others.
     
  3. Tengkorakfx

    Tengkorakfx Member

    Not that simple as that, sometimes RSI can trigger a false signal. That's why we need a confluence, it means we can put another indicator to support our sell/buy decision based on overbought or oversold.
     
  4. NewbieTrader

    NewbieTrader Member

    Yeah, I learned that the hard way. triggering false signal. we do need to bring in another factors to counter this flaw. but overall, it is good. i probably would prefer other indicators (better, if any).
     
  5. andengireng

    andengireng Member

    The use of RSI indicator parameters needs to be adjusted to the time frame trading. Usually, the default time period parameters on the trading platform for almost all oscillator type indicators are 14, including RSI. Based on experience, period 14 is suitable for Daily time frames, but less accurate for lower time frame trading.
     
  6. broforex

    broforex Member

    I think it is better if you explain and insert the picture. So newbie trader like me can learn better. I have read some article about RSI but still can not gain some profit.
     
  7. Tengkorakfx

    Tengkorakfx Member

    I personally using RSI as a confluence. Just use the default setting and put it on the 4H chart (timeframes below it may looks inaccurate)
     
  8. broforex

    broforex Member

    Admirers of RSI always imagine how easy it is to use these indicators. Why not, RSI is always associated with saturated price patterns and a picture of prices that can be seen as a Low or High limit during the trend. But is it true that using the RSI indicator can be so easy?
     
  9. Tengkorakfx

    Tengkorakfx Member

    Well, it depends on how you set it up. Because I had some fake signals with the default settings and some people would recommend to look for the best setups for RSI, and even some would combine it with Stoch.
     
  10. broforex

    broforex Member

    Yes, Agree.. Indicator is not 100% true, but if we can use it or know how to use it , we can analyze up to 80% success. Keep learning and find the best setting of RSI for your own.
     

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