In this video, you will learn about the Relative Strength Index indicator, and how to use it in forex trading. This is a very popular indicator among forex traders. You can observe overbought and oversold conditions in the forex market. You can also obtain reversal points using divergence.
It oscillates between 0 to 100 level. Below 30 is considered oversold and above 70 is considered overbought. The default setting is 14 periods. There are two ways to use this indicator.
The best way to use this indicator is to determine the direction of the trend and trade with it. Other way is to use it in a channel. Once you have marked your support and resistance levels on your chart, you can trade the tops and bottoms.
Inside a trend, you can identify pullbacks, and trade in the direction of the trend. You can wait for the RSI to reach oversold, and then you can take a long entry with your