We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Bullish
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Mixed
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • U.S. Market Analyst at https://t.co/JsVsSmefgR, Shain Vernier covers - ✔️ Safe haven assets in volatile markets ✔️ Central banks and governments ✔️ How will commodities trade in a recession Only on Trading Global Markets Decoded #podcast. Tune in here: https://t.co/1UmEzEbwiy https://t.co/ygwjGNvS61
  • The $USD, Euro, British Pound and Australian Dollar will all be at the mercy of political developments in Asia, Europe and North America this week. An avalanche of PMI data will set the backdrop. Find out from @ZabelinDimitri here: https://t.co/L8cfAgVx94 https://t.co/THWhPAS6AM
  • The price of #gold plunged 1% immediately after the stunning US jobs report crossed the wires. Get your market update from @RichDvorakFX here: https://t.co/8i0L6YIqjy https://t.co/y9dIXazJf9
  • S&P 500, Dow Jones, Nasdaq explode higher with stocks surging in response to shockingly better-than-expected monthly jobs data. Get your #equities market update from @RichDvorakFX here: https://t.co/nuMVWOzzuC https://t.co/M3nGBjd7kZ
  • The record-breaking NFPs increase behind us and the FOMC rate decision on Wednesday sets the tone for my trading video: 'Dow Soars Above 200-Day Average on NFPs, Will the #Fed Keep the Dollar Sliding' https://www.dailyfx.com/forex/video/daily_news_report/2020/06/06/Dow-Soars-Above-200-Day-Average-on-NFPs-Will-the-Fed-Keep-the-Dollar-Sliding.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/kquvec5HVc
  • Seasonal factors, oversupply issues and the outbreak of COVID-19 has seen the price of liquefied #naturalgas (LNG) fall to 22-year lows (1.519), with the situation exacerbated by ‘fuller-than-normal’ storage facilities. Get your market update here:https://t.co/VOqfkBQ4aR https://t.co/OsaphmqEmu
  • Are recent gains in the Indian Rupee and Nifty 50 warranted? Risks are brewing in the background, leaving USD/INR in a consolidative setting as the Nifty pressures resistance. Get your $USDINR market update from @ddubrovskyFX here:https://t.co/svDaSdprvN https://t.co/kgddX1ZHe4
  • I approve of this dry humor. https://t.co/b42GmIZDlL
  • The US Dollar may be at risk to losses against some of its #ASEAN counterparts. USD/SGD, USD/PHP, USD/MYR and USD/IDR have recently broken to the downside. Will losses continue? Find out from @ddubrovskyFX here: https://t.co/0RTlj6maTT https://t.co/59cdbPc4l7
  • The #Nikkei 225 trades at 4-month highs after a 50% surge from the March low, while the RSI registers its first overbought readings since November 2019. Get your market update from @DanielGMoss here: https://t.co/pOEt698Ooi https://t.co/EHD2EHmQLW
RSI Trading Basics

RSI Trading Basics

2013-08-09 19:00:00
Walker England, Forex Trading Instructor
Share:

Article Summary:RSI is one of the most common indicators used for trading Forex. Today we will review RSI and trading tips for trending markets.

Swing traders look at the Forex market and attempt to buy currency pairs low in order to sell them at a later higher price. While swing trading strategies are popular, they completely rely on market timing. In order to help pinpoint their entries, traders can turn to a technical indicator. Today we will review the basics of the RSI (Relative Strength Index) indicator and how they can be used in conjuncture with a trending market.

Learn Forex – RSI with Overbought & Oversold Levels

RSI_Trading_Basics_body_Picture_2.png, RSI Trading Basics

(Created using FXCM’s Marketscope 2.0 charts)

RSI is considered a classic oscillator similar to MACD, CCI or Stochastics. It is calculated by comparing an recent gains to recent losses that push the indicator up and down as it follows the momentum of an underlying asset. To help make RSI easy to read the indicator can be seen segmented into overbought and oversold values. As RSI travels between the levels of 0 and 100, traders will look for overbought and oversold conditions.

Any reading of RSI above 70 is considered overbought. Traders consider overbought to be a condition where the market has pushed up price to making a new relative high. Conversely any value under 30 is read as oversold and considered an area where price may be interpreted as undervalued. Now its time to look how these conditions can be useful to a Forex trend trader.

Learn Forex – EURGBP 4Hour Uptrend

RSI_Trading_Basics_body_Picture_1.png, RSI Trading Basics

(Created using FXCM’s Marketscope 2.0 charts)

Once you have a feeingl for how RSI interprets price, it can then be used to time entries in trending markets. In the example above, we can see a 4Hour chart of the EURGBP currency pair. In an uptrend, traders can wait for an oversold condition. A reading of RSI under 30 would signal a pullback against the primary trend, allowing traders to enter a new position on a pullback from the current high. Entries can be timed when momentum returns in the direction of the trend when RSI closes back above an oversold reading of 30.

---Written by Walker England, Trading Instructor

---Written by Walker England, Trading Instructor

To contact Walker, emailinstructor@dailyfx.com. Follow me on Twitter at @WEnglandFX.

To be added to Walker’s e-mail distribution list,CLICK HEREand enter in your email information.

New to the FX market? Learn to trade like a professional with DailyFX!

Signup for this free “Trade Like a Professional” certificate course to help you get up to speed on Forex market basics. You can master the material all while earning your completion certificate.

Register HERE to start your Forex learning now!

http://l/

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.