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Forex trading strategy #4 (RSI High-Low)

Although no trading system can solely rely on RSI indicator, using it in combination with other tools and proper technical analysis can bring a new edge to your Forex trading.

Setup:
Currency pair: Any.
Time frame: Any.
Indicator: RSI (14) with levels at 70 and 30.


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Hi,

May be I misunderstood you, but why did you enter above 70?
We have rules that say to enter when price goes above 70, forms a top AND afterward drops and exit from overbought area (exit below 70), only then we Sell, below 70.

Best regards,
Edward

Hello Edward, just found your site. It seems I agree with everyone else.
It's really great to see someone answering even the most mundane of questions in such a helpfull manner.
But hey I'm a novice too, so thank goodness someone else is asking them !!!!
I've really enjoyed reading through everything.
I'll be back !
Thank you very much.
regards
Lance.

Thank you, Lance

I'm truly glad you enjoyed it!

Best regards,
Edward

Hi Ed, I am starting in Forex and looking for the best strategy that suits my personality and time availability, and this is the best site I've ever seen so far. Many thanks for your great support.

Just one last question: Can you live only from Forex?

Thanks again, Al from Chile Southamerica

Hi Al,

yes you can, but it'll take years to get to that level, as well as your dedication to trade Forex day in and day out (unless you write/buy a robot).

For me, Forex is not the only income. I run my own business and do other favorite things.

I wish you all the best in your trading career!

Best regards,
Edward

Hi Edward ;

I have been watching RSI (14),as per you if it goes below 30 then buy and if goes below 70 then sell.i woud like to know here till if i am buying or selling till how many pips i need to wait ? cod u please tell me what these values 30 and 70 )in RSI mean ???

Waiting for your response eagerly !!!

Hello Edward :

Your site and your answers i must say very helpful to me.I was trading just lookign at pivot points,support levels and resistance levels but didnt have any idea regarding the indicators.

It is now looking at your posts and explanations i can say i knw something,all things explained and categorised in simple manner.

I just had an query for RSI (14).I knw the rule like above 70 wait unless it forms peek and sell and below 30 wait for the peak and buy

The doubt is what if in 30 and 70 the value at present is ??? Can v trade then ,if yes how can v do that ??? and what this 30 and 70 values represent ??

Thanks in advance for all your great help.

Regards
Ziad

Hi Ziad,

Looking at RSI indicator, we can see that it can take values from 0 to 100.

Readings below 30 indicate RSI being in an oversold zone. (What's oversold is anticipated to be corrected, e.g. a price will go the opposite way - traders will start buying.)

Reading above 70 indicate RSI being in an overbought zone. (Again, since it's overbought, anticipate a correction - traders will start selling).

That's why we watch for these 30 and 70 levels to plan our trades.

For more on RSI, I'd recommend the following website:
http://forex-indicators.net/rsi

Kind regards,
Edward