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).

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