Was first introduced by J. Welles Wilder in 1978 in his book New Concepts in Technical Trading Systems. The value of the RSI is in the range 0-100. RSI is a momentum indicator that can we use to know the following things:
- Divergence of positive / negative
- The momentum of price movements
- Conditions of overbought / oversold
RSI Cross Alert produces a sound alert any time a fast RSI crosses above or below a slow RSI. The indicator also allows to filter alerts using an Stochastic. Way of identifying the conditions of overbought / oversold with RSI is very simple. The overbought is when the RSI crosses the 70 and oversold when the RSI crosses 30. Some books also recommend the 20-80 for overbought and oversold levels.RSI will be more accurate to use in the stable market.
The Centerline Crossover
The RSI can be used to measure the strength of the momentum when RSI crossover at the center line.
This centerline crossover this will really help us in determining the conditions of buying and selling.
RSI False Signal
If we trace from the RSI formula we know basically RSI moves very sensitive. A sensitive indicator allows us to have many suggestions for Buy / Sell. The more suggestions for buy / sell, the more false signals occur. Therefore RSI is more often used as reinforcing the suggestion by other indicators.
So is there any way to eliminate false signals on the RSI? Of course there is. The simplest way is to find the best period on RSI. So that we can use the RSI with a period slightly larger than normal ( 14 ), such period of 18. Or you can learn Forex by yourself if you want to use RSI. Another way is to reduce the sensitivity of the RSI is providing the RSI smoothing using SMA.
Smoothing the graph is very useful for RSI indicator which can often just a quick stop at the area OB and OS or even just a moment through the centerline. In such circumstances, the school will mute it so that the curve becomes smoother.
RSI indicator
RSI_dots.mq4 We consider the Relative Strength Index RSI_dots to be one of the best indicators available.
ind_RSIColored_v1.mq4 RSI Cross Alert produces a sound alert any time a fast RSI crosses above or below a slow RSI. The indicator also allows to filter alerts using an Stochastic.
RSI+MA+LABEL.mq4 Relative strength index indicator combined with Moving average indicator
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