I Talked in previous article about commodity channel index (CCI) you can read it through this link
.Today I will explain RSI Indicator and how to use it in Forex trading
RSI Indicator
It looks like stochastic indicator at using because it distinguishes between increased buying cases and as well increased selling cases , It's measured by digital scale begins from zero to 100
If the readings under the level of that means rising in sales and expect buying will happen
While If the readings were above of 70 level that means rising in purchases and expect selling will happen
Best feature for RSI indicator that it determines when we will close the deal where 50 level -
It expresses about a time period data equals previous 14 days -
Best frame time with RSI is 15 minutes -
This Indicator you can add it on the chart on Metatrader program by clicking on insert then indicators then oscillators then Relative Strength Index
The Ways of Trading Using RSI indicator
: Trading by watching the levels 30 and 70
The 30 level is support level -
The 70 level is resistance level -
The 50 level is for taking profits -
RSI Indicator
Buying Signal : If the price reached the 70 level and came from top to bottom , we ready for selling here , the meaning is if the currency reached to the level of increased buying or buying saturation , There are a possible selling signal when RSI indicator above of 70 level but sure that is not mean that you sell at every time if the price hit 70 level maybe it's a fake signal
Buying Signal : If the price reached the 30 level and came from bottom to top , we ready for buying here , the meaning is if the currency reached to the level of increased selling or selling saturation , There are a possible buying signal when RSI indicator under 30 level but sure that is not mean that you buy at every time if the price hit 30 level maybe it's a fake signal
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