Forex trading strategy #4 (RSI High-Low)

What will be the minimum Take Profit value?

Hello,

Do you support or prefer only RSI-17 Forex strategy or their are more best forex strategies then RSI-17.

Thanks

everyone avoid this strategy, its not working at all

I would say that you cannot simply rely on RSI for entry and exit since price action can remain overbought and oversold for a while in a trending pair. The best use of RSI in my opinion is use it as a trend follower, in the 4h chart for example, in up trend you will see RSI bouncing between 50 and 80, in the down trend it will keep on bouncing between 50 and 30. Adam

Hi Jaybee,

as a trader you should be focused on protecting your trades rather than seeing evil in your broker. A broker, if it's a marker maker, always takes trading positions opposite to yours, but it's done on an automated level.

Making it automated, doesn't however mean that brokers can't artificially steer the market in their own favor, in fact, they can, at least temporarily. Most of the time, if this practice ever takes place, it'll happen during the news hours, or other predicted volatility periods. During those times the market moves fast and covers a lot of distance; at this time it becomes easy to any broker to pitch in with own artificial spikes in price - after all that's a volatile market, nothing is guaranteed.

But that's rather exceptions than a wide spread occurrence. Market makers count money they get from novice inexperienced traders, who simply can't hold on to a winning side for too long. There is no need to manipulate markets and eventually turn the trading community against them.

As you learn, your trading strategy will become your main weapon. Setting stops is not the easiest part of trading, but eventually you'll learn it.
There is also a number of indicators that help with stops and exits.

In the meantime, try to read whatever you can find online, also check out our Money Management and Exit Section for some useful ideas.

Happy learning and trading!
Edward

Hi Edward,

I also find this site (work!) very valuable for newbies like myself!

I believe that most successful traders don't bother or have no time to answer very basic questions.

One or two of my winning orders had suffered closing early automatically notifying 'sorry .....' and something I couldn't even have time to read.

I am aware of the order slippages during volatilities.

Now, is there any other ways (ie. controlling traders) that a broker can make money?

If yes, please explain!

cheers,

Jaybee

Hi Marcelo,

When you plan to start with a small account, and it's going to be your first trading experience, the shorter time frames are preferable, but you have to still remember about proper money management.
1 hour time frame is a popular time frame for many beginner traders, although some prefer to start on even smaller ones, such as 5 min or 15 min.

Regardless your choice, you ultimate focus should be concentrated on the lot size and the number of lots you trade. It is highly advised to start with 0.01 lot (called "micro lot") and place no more than 2-3 trades at one time.

As you continue studying, you'll very soon discover that settling for RSI based trading alone is never a final strategy. There are millions of ways to add/improve and improvise.

All the best in your studying and trading!

Kind regards,
Edward

Hi Edward, was reading your last reply to Marcelo where you suggested using the 1 hour, 4 hour or daily time frame. My question is for me with a similar 1 hour twice a day schedule for forex, is it ok if i use smaller time frames like 1min, 15min, 30min? Shouldn't i be using shorter time frames since i have less time to play? Furthermore, if i have little capital, trading shorter time frames allows me to place smaller stop losses. What do you think?

I'm also a newbie that started reading up on forex 2 months ago. I also read that you survive on forex and other businesses. That's quite worrying to me which brings me to my 2nd question. Is it possible for a person to fully live just on forex alone earning an average income or more?

Hi Marcelo,

you've approached the trading from the very right point and picked the core components very well.

Considering the time you can dedicate to trading every day, I would recommend focusing on trading strategies that use Pending entry orders, since you'll be able to analyse charts for several minutes, set high probability orders and leave it for the day.
Also, you should pay close attention to placing protective Stops, without it, you can't afford to leave an account for the mercy of the market.

Your trading can be built around 1 hour, 4 hour or a daily time frame. (Since you'll be working with Pending orders, you can easily analyse 1 hour charts, and there is no need to monitor them every hour as long as you also have a Take profit level pre-set).

Hope this will be helpful,

Happy trading!
Edward

Hi Edward,

I am really impressed by the quality of the information available in your site. You are doing a great job keeping this up and also taking the time to respond to the hundreds of questions we newbies post day after day. My congratulation to you for a great job.

I am fairly new to Forex trading and have been doing my research lately only to find out that while thousands of strategies are available to everybody, the two main factors that influence the outcome are Discipline and Money Management, and that is something you cannot download from a website. You stated that clearly on every possible occasion.

Having said all this, now my question: I don't have the freedom to spend much time in front of then monitor; at the most I can spend 1 hour twice a day. What approach (in terms of strategy and time frame) you recommend when having these time restrictions?

Thanks again
Marcelo

Etoro should 100% have an RSI indicator. Just ask the support team there.

Regards,
Edward

how can i get that indicator i have etoro but dont se that indicator

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

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 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 !!!