Home Three suggestions for using the Relative Strength Indicator

Three suggestions for using the Relative Strength Indicator

Relative Strength Indicator, also known as forex rebate club (RelativeStrengthIndex) cashbackforexbroker one of the most commonly used forecast forexrebateclubg aids in forex trading because RSI can help investors predict cashbackforexexnesss cashback forex entry times, etc. The following will explain to you the use of RSI three suggestions a. In a downtrend, the presentation of RSI may lead investors to sell too much short When new to RSI and other auxiliary tools indicators, more likely to overbuy or sell short but in the trend is very clear market trend, when faced with the RSI presentation may turn, if only use intuition to decide how to enter the market will be negative. The RSI is a momentum swing indicator, which means that excess aftershocks caused by the swing may lengthen the period in which the RSI should be trending, thus leading to excessive buying or selling short As shown in the chart below, on July 27, the RSI fell below the 30 range, and since then prices have been declining, totaling about 400 points, but as shown on the RSI, the trend has returned to 30 again since July 27. After 27, the trend is back above 30 again, and even have close to 70 points in time so that in certain cases caused misleading, resulting in novice in looking at the RSI forecast chart, may enter the market when the turn and over-buy the same, if the market price shows a clear upward trend, but RSI may mislead novice in this trend too much short selling, such as Figure 1 Figure 1: too much short selling & nbsp;Second, look at the midline Almost all oscillators can show the midline, but it is forgotten by many people use the midline that is half of the range For example, the midline of 30, 70 is 50 In technical analysis use the midline to show the change in trend If the RSI is above 50, the market is predicted to be an upward trend, investors can consider entering the market to buy Conversely, below 50 Conversely, if the RSI is above 50, the market is predicted to trend downward, as shown in Figure 2 Figure 2: The Role of the Midline Conversely, when prices are rising, the RSI will be above 50 and even sometimes, the midline will play a more pronounced role when the trend is high between 50 and 70 Similarly, when the trend changes and the RSI drops below 50, the midline can play the same role by looking at the midline However, 14 is not necessarily suitable for all market forecasts. In contrast, traders who trade long term will choose a parameter greater than 14, such as 25, to observe trend fluctuations over the long term In Figure 3, the red line above is 7, for comparison, and the green line below is 25. with 30 and 70 crossover is very little Figure 3: Parameter values

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