Okay! So we’re on the same page then!?
Do you just base your decisions on price action then?
I also do that! When the price goes up, the RSI shows information about overbought readings for some time, while the MACD shows divergence by beginning to turn down as the price continues to advance. This gives an additional signal that the market is reaching a level where it will retrace soon. I religiously use both these indicators - whether trading a higher timeframe with turnkeyforex or scalping with ICM. I confirm everything and anything that is about my money.
When they say there is nothing like the “best thing” in the market, they also mean that there is nothing like “overhyped” or the “worst”. Trading is everyone’s personal business and that’s how it must be considered. It should not be thought to be a community thing that should suit everyone.
Basically yeah, supply and demand, order blocks. Easy to spot once you know how.
The only reason why people use RSI is that it shows the measure of the change in price momentum and it works great for that purpose. If you expect it to work in every odd situation, it will feel like an overhyped indicator to you. I as a matter of fact have been using this indicator perfectly well on avatrade’s platform and have been maintaining a fairly good win ratio.
It is not just knowing whether an asset is overbought or oversold but a lot of other things that I do with RSI. I have been using closing trend lines in RSI for some time, irrespective of the broker I’m using at the time, ig, ib, xtb etc etc. When these lines are broken at least 3-4 days before, it gives an advanced signal that the price is going to break the same trend line.
I got to know about that a few months ago. Though I never tried it, I wanted to know if there is anyone doing it.
Thanks for the message! As you seem interested, I would also like to tell you that when you are considering the relative strength of the asset over a specified period of time, you can see a breakout at least 2-3 days in advance in RSI than you would have seen otherwise.
I find RSI extremely helpful when I want to get information about advance breakout and breakdown. I usually use it with turnkeyforex and when the indicator has breached the previous top but the price hasn’t yet, it is an advanced breakout. But when the indicator has breached the previous bottom but not the price, it is a case of advanced breakdown. I tried doing the same with my other broker (oanda) but looks like the settings were not right. Didn’t get the same level of accuracy. So perhaps you need to meddle with the settings.
It is no surprise that traders use RSI with MACD to validate the results that they get. All you have to do is enter the market whenever you receive an overbought or oversold signal from the RSI, but do check if MACD shows the same.
Make sure that you close your position as soon as any of the indicators provide an exit signal.
Like most other traders, I also use RSI with another indicator, moving average cross indicator with the 4-period and 13-period MAs. When I get an exit signal, I wait for a candle to close beyond both lines of the moving average cross.
I believe it is more of a personal trading experience. There is no denying the fact that RSI works great for stocks. But it works in a similar way for forex also. I understand candlesticks, chart patterns, trend lines, and channels more than anything else. This is the reason why a price action indicator is what decides whether I should exit the trade or not. If I don’t get the signal, I keep holding the position for as long as I get the exit signal.
any indicator by itself is pointless. You need to use it just as one confluence in your strategy
For many who don’t know, you can see a bullish failure swing that forms when RSI moves below 30, bounces back and goes above 30, pulls back, and holds above 30, hence, breaking the prior high. It is said to be a mover to oversold levels, and then a higher low above the oversold levels.
As you are calling RSI over hyped, I can assume that it didn’t work for you the way you were expecting it to. It’s completely okay. There are many other indicators that you can consider making use of.
As a day trader, there is no other indicator that I can think about using. I agree RSI keeps generating infrequent trades but I don’t mind getting them when they are all high-quality trades. I usually use it with turnkeyforex and try my best to find quality trades to make up for infrequent intraday trades. It was going all good but recently while trading with XTB, I got to know that the performance can be made better by lowering the time frame or selecting a sensitive oscillator with a lower period.
Perhaps you can give that a shot!
Yeah RSI does work well with stocks but I’ve also been using it in forex. Not just this alone, I pair it up with short-term moving average crossovers like the 5 EMA crossing over the 10 EMA. These compliment the RSI quite well. Give it a try if you’re fx trading.
No indicator? How’s that even possible? I mean I’m saying this because I’ve been using RSI indicator for day trading with octafx and it’s turned out to be pretty good. I also tried the default 14 periods RSI setting for swing trading.
Of what I know, rsi is bound to give false signals. Particularly in the volatile market, it remains above 70 or below 30 or a long time. Right?
FFS… 80 posts and not a single screenshot of how to change an Indicator and make it work for you!!
RSI can be a great tool as long as you don’t trade it like the Market has educated you too!
Trade the 50 level cross of the RSI, open any pair on a 4 Hour Chart, change the RSI Periods to 20 to smooth price action, set your upper level to 60, lower level to 40 and add an equilibrium setting by adding the 50 Level.
Rules…
RSI breaks above 50 and you are looking for BUY opportunities…
RSI breaks below 50 and you are contemplating SELL opportunities…
I’ve just laid this simple, simple strategy over the GBPAUD on the 4 Hour… Do some simple back testing by overlaying the same strategy on your preferred pair and see if similar opportunities are displayed…
Most will have similar characteristics… If not, move on to another pair until you find one that fits this criteria and trial some trades on a Demo… Always, Always apply risk management and you will have some managed losses and some major profits…
All Indicators are lagging and Overhyped… Especially if you trade them the way most are educated too.
Hope this helps some of you to look at Indicators in a new light…
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