Tuesday, July 18, 2006
Learn online forex trading - its relative strength index
Learn online forex trading - Importance of relative strength index
1st of all apologies for delay in posting this message as I was busy with some other work for past few days.
This message will be on a very important indicator called -
Relative Strength Index (RSI)
RSI is an oscillator which tells about the current momentum. It compares the recent profits against recent losses to see which direction is the currency pair heading. Like other important oscillators (MACD, Stochastic etc), RSI also tells about the oversold and overbought levels. The value of RSI ranges from 0 to 100. If the value is below 30, it means the currency is oversold in world of online currency trading. However if the value is above 70 it means that the currency is overbought
Please remember to use it in conjuction with other indicators such as moving averages or resistance/support levels.
Also, don't use a lot of oscillators at the same time as sometimes they conflict with each other.
I generally use RSI along with MACD. If RSI is above 50 I generally use it to make long trades (buying the leading currency in the currency pair) and vice versa when RSI is below 50.
Thats all in today's message to learn online currency trading. Keep visiting to learn more.
