Forex Relative Strength Index RSI Indicator

Forex Relative Strength Index RSI Indicator

Forex Relative Strength Index RSI Indicator (RSI) is a price-following oscillator that ranges between 0 and 100.

When Wilder introduced the Relative Strength Index, he recommended using a 14-day RSI.. Since then, the 9-day and 25-day Relative Strength Index indicators have also gained popularity.

A popular method of analyzing the RSI is to look for a divergence in which the security is making a new high, but the RSI is failing to surpass its previous high. This divergence is an indication of an impending reversal. When the Relative Strength Index then turns down and falls below its most recent trough, it is said to have completed a “failure swing”. The failure swing is considered a confirmation of the impending reversal.

Ways to use Relative Strength Index for chart analysis:

  • Tops and bottoms
    The Relative Strength Index usually tops above 70 and bottoms below 30. It usually forms these tops and bottoms before the underlying price chart;
  • Chart Formations
    The RSI often forms chart patterns such as head and shoulders or triangles that may or may not be visible on the price chart;
  • Failure swing (Support or Resistance penetrations or breakouts)
    This is where the Relative Strength Index surpasses a previous high (peak) or falls below a recent low (trough);
  • Support and Resistance levels
    The Relative Strength Index shows, sometimes more clearly than price themselves, levels of support and resistance.
  • Divergences
    As discussed above, divergences occur when the price makes a new high (or low) that is not confirmed by a new high (or low) in the Relative Strength Index. Prices usually correct and move in the direction of the RSI.

Calculation

RSI = 100-(100/(1+U/D))

where:

  • U — is the average number of positive price changes;
  • D — is the average number of negative price changes.

Forex Relative Strength Index RSI Indicator

What does Forex Indicator mean?

A forex indicator is a statistical tool that currency traders use to make judgements about the direction of a currency pair’s price action. Forex indicators come in many types, including leading indicators, lagging indicators, confirming indicators and so on. Popular forex indicators include moving averages, relative strength index (RSI) and average true range (ATR). A forex trader must choose the indicators that fit his or her trading strategy.

How to install Forex Relative Strength Index RSI Indicator?

  • Download Forex Relative Strength Index RSI Indicator.zip
  • Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /
  • Copy tpl file (Template) to your Metatrader Directory / templates /
  • Start or restart your Metatrader Client
  • Select Chart and Timeframe where you want to test your forex indicator
  • Load indicator on your chart

How to uninstall Forex Relative Strength Index RSI Indicator?

To shut down an indicator, one has to remove it from the chart. At that, its drawing and recalculation of its values will stop. To remove an indicator from the chart, one has to execute its context menu commands of “Delete Indicator” or “Delete Indicator Window”, or the chart context menu command of “Indicators List – Delete”.

Download Free Forex Relative Strength Index RSI Indicator

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