Foundations of Technical Analysis: Fibonacci & RSI
- Part 1: Introduction to Basic Trendline Analysis
See these tools & methodology used in practice, Join Michael for his Weekly Strategy Webinar on Monday mornings.
In this bi-weekly webinars series on the Foundations of Technical Analysis, we discuss the methodology of constructing a basic trade setup. In this session, we review how to incorporate the use of Fibonacci & RSI in our trading strategy.
Fibonacci retracements can be a useful tool in identifying where a corrective pullback could find support / resistance. This tool is best used in range scenarios or when price action is trading within the confines of a given high / low. In trending markets or breakout scenarios, Fibonacci extensions can project where a given advance / decline may encounter support or resistance.
We also reviewed using the Relative Strength Index (RSI) as a way of gauging when markets may be nearing points of exhaustion. This widely miss-understood oscillator can also provide hints regarding the broader directional trend.
A review of the latest AUD/JPY setup published earlier this month highlight a live example of how we utilities this type of analysis to translate an idea into an actionable trade.
In the next session we’ll discuss how to integrate proper risk management alongside the concepts we’ve been covering to offer a more holistic trading strategy. Click here to register free!
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---Written by Michael Boutros, Currency Strategist with DailyFX
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.