Forex Academy | ForexGen

Relative Strength Index (RSI)

Relative Strength Index, or RSI mean
A technical indicator used to compare the magnitude of recent gains to recent losses to determine overbought and oversold conditions in the market. . It can be calculated using the this formula:

Rsi=100
100- 1+rs

readings below 20 refer to oversold, while readings over 80 indicate overbought. the RSI ranges from 0 to 100

Using RSI
Relative Strength Index is used as the stochastics, you can see From the chart RSI dropped below 20, it will be an oversold market., the price back up After the drop

The RSI is best used as a valuable complement to other stock-picking tools. Relative Strength Index, or RSI, is like the stochastics in that it means overbought and oversold conditions in the market. It is scaled from 0 to 100. readings, while readings over 80 indicate overbought, below 20 indicate oversold


USING RSI
RSI can be used like stochastics. From the chart ,you can see that when RSI dropped below 20, it is an oversold market. After the drop, the price shot back up.

RSI is a famous tool because it can be used to indicate the trend formations. When you find a trend is forming, you can take a look at the RSI and look at if it is up or under 50. If you are looking at a possible uptrend, you should be sure to make the RSI up 50.and when f you are looking at a possible downtrend, you can make sure the RSI is under 50.

We can see in the chart that a possible uptrend was forming. To avoid the fakeouts, we should wait for the RSI to cross above 50 to confirm the trend., It will be a good indication that an uptrend has formed, When the rsi passes up 50

We have many types of indicators, let's see how we can put all of what you just learned together...

ForexGen.com is an online trading service provider supplying a unique and individualized service to Forex traders worldwide. We are dedicated to absolutely provide the best online trading services in the Forex market.

ForexGen provides a unique online trading experience based on our intelligent online Forex trading package, the ForexGen Trading Station, including the best online trading system.

ForexGen serves both private and institutional clients. We have a strong commitment to maintain a long term relationship with our clients.