Oscillators: Relative Strength Index (RSI)

RSI also helps determine the overbought / oversold state of the market to buy low and sell bullish. The indicator readings fluctuate between 0 and 100. If the RSI rises beyond the 70 mark, it means the pair is overbought. If the RSI falls beyond line 30, the currency pair is oversold. In addition, as in the MACD, the divergence between the RSI and price may be a sign of reversal in the market.

The indicator can also be used during a trend in order to determine the best levels to enter and exit the market. In this case, you should trade only in the direction of the trend, when the indicator leaves critical levels. For example, you can buy during a bullish trend when the RSI is above 30. In the flat (sideways) market, you can use RSI signals as buy / sell signals.


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