Forex RSI indicator - How to make money?

Forex RSI indicator - How to Actually Use Darn thing to make money?

Hi, my name is Christopher, and I've been trading on the exchange since 2004. When I first started trading the markets, there was much ...

Article Word Count: 386 [View Summary] Comments (0)

Forex RSI indicator are high. I have some favorite ones, and RSI is one of them. It's nice to know what RSI indicator is and how it works, but its not really point to help you make money? It is the primary goal of all indicators, exchange rates, and I want to show you RSI strategy that just might do the trick for you.

Quickly review the RSI indicator oscillator is. This means that it ranges between 0 and 100 and is used to indicate bullish and bearish momentum. The creator of the indicator RSI indicator recommends using a 14-period setting that most forex trading programs are standard.

There are levels called overbought and oversold levels that can tell you that the market has hit an extreme. Oversold is any reading below 20 (some traders say 30); overbought is any reading above 80 (some traders say 70). It's your choice whether to choose the 20/80 or 30/70 position. The conservative position is 20/80.

Now a problem that many beginning forex traders is that they assume that once the indicator has reached the overbought and oversold levels, it will quickly go to more normal levels in the soil. While RSI will eventually come out of overbought / oversold conditions, is no guarantee that it will do so quickly.

Only one work of caution.

So here's how you can trade with RSI indicator.

Identify the major trend in the currency pair. There are many ways to identify a trend, and one way is as simple as looking at the table and see which way the price is sloping.

Once you have identified the major trend, watch for price to drop. Generally, every time there is a trend that the market is turning a bit to catch its breath before continuing forward.

During these pullbacks, many times you reach RSI indicator overbought / oversold territory against the major trend. It is good for you, because ultimately, you still want to trade with the trend.

When you see the RSI in these extreme conditions in terms of current trend, wait for it to return back to normal conditions. After passing out from overbought / oversold territory (this time with the biggest trend) have a potential trading opportunity.

Learn more about the basics of Forex Forex my latest training ebook for more than 35 pages, called "The Insider Secrets to Forex Trading for Beginners". Get it now absolutely free. It gives more detail on this subject and many, many other details profitable traders know.