The cashback forex.com">cashback forex profit calculator indicator can be used in the same way as the stochastic indicator to identify potential tops cashbackforexpipcalculator bottoms by determining whether the market forexcashbackprofitcalculator overbought or oversold The Relative Strength Index, or RSI, is similar to the stochastic indicator in that it is also used to identify overbought or oversold conditions in the market It also has a range between 0 and 100 Typically, a reading below 30 The Relative Strength Index (RSI) indicator is a technical indicator widely used by traders to identify oversold and overbought conditions on charts RSI is an oscillator type indicator that moves up and down from 0 to 100 depending on market conditions RSI is considered a leading indicator which means it can be used to predict future price movements of financial instruments, such as currency pairs RSI indicator Developed by J. WellesWilder and introduced to the market in 1978, the RSI indicator is usually shown as a horizontal chart attached to the bottom of the currency pair chart, which has a single line that oscillates between 0 and 100 When the RSI is between 0 and 30, this usually indicates oversold market conditions and a high probability of an upward price correction. When the RSI crosses from below the center line (50 level) to the area above it, this usually indicates an upward price trend in the affected currency pair When the RSI crosses from above the center line to the area below it, this usually indicates a downward price trend in the affected currency pair Indicates a downtrend in the price of the affected pair RSI Divergence Signals The RSI indicator may also indicate that the RSI line is diverging in the opposite direction from the prevailing price behavior. Bearish RSI Divergence Bearish RSI divergence usually occurs when the price of a currency pair is trending higher and the RSI line is falling, which is a strong bearish signal. In other words, an initial cross above the 70 mark usually warns traders that they should be prepared to sell after the RSI falls below the 70 mark. The same applies to RSI oversold signals, which usually occur when the RSI line exceeds the 30 mark and you should not actually buy until the RSI line moves out of the oversold zone. When trading, always trade in the direction confirmed by the RSI line after the price of the currency pair has closed two to three candles in your preferred direction How to Set Stop Loss and Take Profit Levels When using the RSI indicator, ideally your stop loss order should be slightly above the top or bottom of the latest swing that occurred before your trade price reversed Your ideal take profit level should be when the RSI line is above or below the When the RSI line is above or below the center line (50 level), you should use a trailing stop to lock in some of your profits (if any) In some cases, the trend may reverse at or near the center line, which is why this is a good profit taking level. May be overbought or oversold for a long period of time In addition, since RSI is a leading indicator, it generates a lot of false signals when the asset it is used to measure shows strong trend characteristics You should always use stop orders to minimize your risk exposure when trading with RSI How to calculate RSI Most modern trading platforms, such as MetaTrader4 and MetaTrader5, will automatically calculate RSI for you but it is useful to understand how to do these calculations to better understand how RSI works The default setting for RSI is 14 periods RSI = 100 - [100/(1+RS)] - where: RS (Relative Strength) = Average Gain/Average Loss Here is how you find the Relative Strength: Calculate the last 14 reporting periods and divide by zero this is your average gain now, find the average loss add all losses for the last 14 reporting periods and divide them by zero after calculating both, divide the average gain by the average loss this will give you the relative strength (RS) you can then apply RS to the RSI formula conclusion the relative strength index is a useful tool that can help traders predict existing trends The RSI indicator generates trading signals when there is an overbought or oversold situation When a bullish or bearish divergence is found in an existing trend, it also alerts you that the RSI is the leading indicator and therefore can easily generate false trading signals Always use it along with other indicators for trade confirmation Related reading How to use RSI indicator divergence to determine tops?　　Relative Strength Indicator (RSI) is one of the technical indicators. The theory of the Strength Indicator is that any big rise or fall in the market price will fluctuate between 0-100 According to the norm analysis, it is considered normal for the RSI value to move between 30-70, and at 80-90, it is considered The market has reached an overbought state, to which the market ...  Foreign exchange learning how to use RSI indicators in the sideways market during the turbulent period, we may find a long period of time prices are floating up and down when prices fluctuate between resistance and support, with the passage of time will gradually develop the following chart of the United States crude oil prices in the pattern, Foreign exchange advanced learning: the basic use of RSI indicators Article Summary: RSI indicators are commonly used by forex traders. RSI indicator is one of the most commonly used indicators for forex traders, today we introduce RSI and the trend trend trading skills how to use RSI in the forex market trading for those investors who are willing to learn more about technical analysis, they often choose to learn technical indicators first technical indicators of a wide variety, each with its own characteristics, functions and applicability depending on the goals of investors The principle of relative strength indicator RSI and the formula for calculating relative strength indicator RSI is simply a numerical calculation method to find out the comparison of the power of buyers and sellers, for example, there are 100 people facing a commodity, if more than 50 people want to buy, bidding up the price, the price of goods will rise Relative Strength Index (RSI) Relative Strength Index ( RSI is a technical indicator used to indicate when the market is buying short or selling short When these signals appear, traders can use them to find pullbacks or reversals It is derived by calculating the average of the rising and falling cycles, thus showing RSI general research and judgment criteria RSI research and judgment is mainly based around the RSI values, long-term RSI and short-term RSI crossover conditions and RSI curve The general analysis of the shape of the RSI mainly includes the size of the range of RSI values, the oversold and overbought situation of RSI values, the long and short-term RSI lines...  RSI value of overbought and oversold Generally speaking, the RSI value above 80 and below 20 is the dividing line of the overbought and oversold area (1) When the RSI value exceeds 80, it means that the whole market is too strong, the power of the parties is much greater than the power of the short side, the power of the two sides is disparate, the parties are winning, the market is in... The RSI is the most important thing that can show the current market situation in the strong city (60 above), the bull market (40-60) or weak city (40 below), and can predict the price will top back to soft or bottom back up, but the RSI can only be...