Hello Traders,
I have a question concerning the MT4 platform.
When I add the RSI indicator, it only gives me a few options to change the color etc.
I just learned about the RSI and the importance of RSI Divergence. So my 1st thought was, that I would love to have the RSI indicator drawm in two different colors and maybe in different thick lines.
The idea is that it would be very easy to see if there is a RSI divergence or not if the color of the line would be drawn in red, if the market goes into the opposite direction, green if the market goes into the same direction. In addition it could be useful to have some variables to determine how sick the line should be drawn; the higher the divergence, the bigger the line.
Is there any way to set up something like that in MT4?
Hello.
An interesting concept (and I say this as I do consider myself somewhat of an authority on RSI given that it was developed by J. Wells Wilder Jnr. who is my ‘mentor’ as it were).
To answer your question directly: there’s no way to set that up in MT4 as ‘standard’. What I’m saying is that you’d need to code (or get somebody to code) and RSI indicator for you that will do that.
The above being said though: I don’t believe it will be possible or useful (but this is, of course, my own opinion and maybe I don’t understand FULLY what it is that you’re trying to do). What I’m saying is that if you trading RSI divergence: RSI does not diverge in a straight line from price. In other words: it may diverge, then follow price, and diverge again, and it’s only the divergence peaks or troughs made that are tradeable. In other words: the color of your RSI line will probably change many times while such divergence is becoming apparant.
How much reading and research have you actually done on RSI if you don’t mind my aksing??? It’s a rather misundertsood and misinterpreted indicator by the way. For a better explanation of what I mean take a look at this thread: TechTraderCentral - Additional Note - J. Welles Wilder Jnr.
Wilder’s book is also available for download over there after free registration. You’ll find the chapter on RSI most enlightening I assure you. For one thing: it’s common mistake made by traders that use RSI to buy or sell the moment that divergence becomes apparent. Not so. Wilder is very clear on where your entry points are supposed to be and this makes the difference between taking a false signal (and invariably losing money) or trading these divergences profitably.
Regards,
Dale.
Hello Dale,
thank you for the feedback. To answer your question I am totally new to RSI and I just read some information about it on Stockcharts.com (RSI) and watched some videos where people use it as an indicator.
Probably I still do not understand the RSI completely and that is why my 1st second thought about highlighting the divergences would not be very useful.
I will follow your link and try to learn more.
Would you consider the RSI to be a good additional indicator? Like using Bollinger Bands or Ichimoku and RSI to support finding good market entries/exits?
Hi,
Well you’re asking the wrong person here i.e. I’m pretty biased as I’ve, for the most part, built my entire trading career on the work of J. Welles Wilder Jnr.'s work!!! LOL!!! One (profitable) trading system that I trade uses ONLY RSI and nothing else. That’s not to say that it’s the best indicator around (although it is very widely used not only by traders but even analysts alike) i.e. the said trading system is profitable because of it’s money management technique not because RSI is ‘magical’.
But if you take a look at Wilder’s book and the chapter on RSI you’ll get a far better perspective. Too many of these websites give far LESS information than should be given about any specific indicator or trading system and that’s often WORSE than NO information at all!!! ADX is another ‘primo’ example as well as Parabolic SAR, Bill Williams’ work, the list is endless. I guess what I’m saying is that you’re far better off going to the ‘source’ than to some or the other brokers’ website where they’re only showing you ‘the tip of the iceberg’ as it were. I’ve seen some interpretations of ADX that have had me ‘rolling on the floor with laughter’ or ‘ROFLOLLING’!!! LOL!!!
Regards,
Dale.
Hey Dale,
I appreciate the nice feedback. I just recognized that you are from South Africa, my sister just moved there but she is in Capetown.
Following your advice I will get the book of Wilder and study it. I do not like ebooks at all, I hope I can get it via amazon or something, because right now I am in Vietnam.
Have a nice weekend,
Chris
Hi,
You don’t need to buy it. It’s no longer subject to copyright. All you need to do is go register on those forums that I told you about and download the thing. I don’t like ebooks either. Obviously I have the original which I purchased and was my very first book which I even to this day treasure. But if you want to get started: order it but you can at least have access to it while you’re waiting for it to be delivered. And yes: you can purchase it from Amazon or from Wilder’s organisation called ‘The Delta Society’ (http://www.deltasociety.com/) (and as a matter of fact if you search these forums you’ll find a discount code for the book that you must quote if ordering direct from them i.e. take a look for any threads that I started here on Wilder’s trading systems and stuff like that. Sorry but there’s too many posts on those threads for me to look for it right now).
Regards,
Dale.
Dale I have been left speechless following your replies here, your knowledge of this indicator is enormous. It shows your are not blabbing when you said you have been working with it since ‘Adam’.
I think if he follows your advice he’ll do well, with other materials online. I did watch this Video sometime ago on RSI and it helped me, here it is: RSI - Profiforex Forex Broker