This is the second article in our RSI series. The RSI measures the relative changes that occur between higher and lower closing prices.

Traders use the index to determine overbought and oversold conditions, valuable information when setting entry and exit levels in the forex market. RSI values below 30 and over 70 are worthy of attention.

The key points of reference are highpoints and lowpoints, especially when respective values cross 15 or The RSI attempts to convey pricing momentum, but sideways action in the market can confuse. Skill in interpreting and understanding RSI signals must be developed over time, and complementing the RSI tool with another indicator is always recommended for further confirmation of potential trend changes.

In the next article on the RSI indicator, we will put all of this information together to illustrate a simple trading system using this RSI oscillator. Basic technical strategies based on crossovers explained.

Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit.

How to Trade with RSI in the FX Market

The high degree of leverage can work against you as well as for you. OptiLab Partners AB Fatburs Brunnsgata 31 28 Stockholm Sweden Email: You are using an outdated browser.

How do I use the Relative Strength Index (RSI) to create a forex trading strategy? | Investopedia

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