Digging into the quintessential overbought oversold indicator! Oscillator indicators in general, are risky and unreliable beasts. They might look friendly and approachable at first, only to BITE your hand off just when you are most comfortable! The RSI indicator is usually the go to oscillator for the forex trading strategien und methodenkompetenz trader when deciding to enter that first trade.
Come on, admit it, we have all done it! We take a quick glance at the RSI indicator in search of that sweet confirmation bias when we are just itching to make a trade. It is almost impossible to resist the siren call of a trading signal from our favorite indicator. But approaching trading in a passive fashion like this is dangerous and will lead to the destruction of your account eventually! In this article I will teach you how to avoid some of the major pitfalls that beset most beginner traders when it comes to the RSI indicator. I am going to break down the RSI indicator so you understand it from head to toe.
I will explain the top 5 RSI trading strategies that we hear so much about, what they mean and how to trade using them. 1000, and a sensible stoploss strategy. These are the nitty gritty details on how the RSI indicator is built. In reality your charting software will do this calculation for you, thats what technology is for! 1: Pick the base number of periods on which to base the study. 2: compare todays closing price with yesterdays.