Relative Strength Index

Tue Aug 27, 2019 12:45 am
avatar  Forex

The Relative Strength Index (RSI) is a popular indicator of technical analysis used in many trading strategies. With the RSI indicator, traders can see market momentum and see if the values ​​are overbought or oversold.

The RSI indicator is displayed on a different chart than the asset's price chart. It consists of a single line and two levels that are set automatically.

The vertical axis of the RSI goes from 0 to 100 and displays the current price compared to its previous levels. When the price rises to 100, it is a very strong uptrend. Any value over 70 is considered overbought. When the price drops to 0, the value indicates a strong, continuous downtrend. Any value below 30 is considered oversold.

This forex strategy is based on taking advantage of the price declines between these levels. However, this indicator is only used as part of a broader entry and exit confirmation strategy, as the RSI may give false signals in the event of sharp price movements.


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