What is RSI?
RSI or (Relative Strenght Index) is a momentum indicator used in technical analysis that measures the strength of the price change with the help of overbought and oversold levels.
The indicator is really popular and is displayed as an oscillator that moves between the two extremes and can have a reading from 0 to 100. This indicator was originally developed by J. Welles Wilder and introduced this system in his book named “New concept in the technical trading system”.
How to setup RSI on Binomo?
Setting up RSI on Binomo is very easy. Once you have logged into your Binomo account. Click on the indicator button on left-hand side corner.
You can also change the colour and the time frame in RSI. If you want to trade in a short time frame you can change the RSI duration to 10 or 9. Here, In this article, I assume that you will trade on at least 15 minutes chart.
How to read RSI?
Understanding How to read RSI? is really easy. You just need to understand about two regions overbought and oversold regions. When the RSI line is near 30 the market is said to be at an oversold level and here we should make a buy trade. Similarly, When the RSI line is near 70 the market is said to be an overbought level and here we should make a sell trade.
To understand this concept properly let’s check a few examples:
Given above is a 1-hour chart and we can clearly see that the RSI line is near the oversold level so, here we can take a buy trade.
Similarly, Given above is a 1-hour chart and we can see that the RSI line is near the overbought level. So, here we should take a sell trade.
RSI is one of the most popular trading indicators used by traders to identify the current trend with the help of Overbought and Oversold Level.
This indicator is really powerful. However, If you want to achieve much better results with the same you can the same indicator with Stochastic.
I have covered everything about RSI. You can try practising the RSI with Stochastic in the Binomo demo account. If you still have any issues do comment below and share with your friends If found this article helpful.