Forex RSI indicator - sequels Trend

Forex RSI indicator - A term for sequels Trend

Forex RSI indicator - relative strength index, or - are used to show you when currency pair is overbought or oversold. Overbought and oversold simply means that the upward or downward trend run out of steam and may be setting a trend reversal. The RSI is a great first clue to tell when the market is about to turn.

So how to use the Forex RSI indicator when trading?

Forex RSI indicator is a vibrator - it just means that its value always ranges between 0 and 100.

Value close to 100 (usually 80 or above) indicates that the market has gone too far and that we should seek confirmation of trend reversal.

Conversely, the value of 20 or below means that the market has fallen too much and need to start growing.

Now the problem with Forex RSI indicator is that most people try to time the reversal of this trend. Experienced traders describe it as if trying to catch a falling knife. You eventually take, but will be reduced, bruised and bleeding when you are done.

So, the secret of using relative strength index is the time trend reversals with it. Instead, you should try to identify the trend of sequels it.

Here's what I mean.

Usually in any strong trend, the market pulls back before continuing on his way. Maybe the price is increased from 1.2000 to 1.2500 over the past week, but at that time the price back 50-75 pips, a few times before continuing up.

Use Forex RSI indicator those pullbacks to indicate when a good time to buy the currency in anticipation of the continuation of the trend. This ensures that you are still dealing with the major trend, and also allows you to keep a healthy risk to reward ratio.

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