RSI index indicator
Another tool for finding the best market entry points, the RSI indicator, allows you to quickly and, most importantly, accurately analyze the prevailing trend in the Forex market.
The script works equally effectively on all currency pairs and any timeframes, and is completely universal.
It allows you to trade using virtually any trading strategy, and the available settings allow you to customize the script to suit your needs.
The RSI index is also known as the relative strength index; the indicator developed on its basis makes it possible to determine the occurrence of changes in the main trend of the price movement of a currency pair.
The basis of the work is the divergence of two moving averages, and the main signals are their intersection of the set price levels.
If desired, all settings can be left unchanged; even with them, the tool works quite accurately.
After completing all the necessary steps, the indicator window will appear below the currency pair chart. In it, you will be able to observe two curved lines that move between two levels.
There is also a row of green and red bars at the bottom of the screen; they serve as an additional reference point when a new trend emerges.
Setting up the RSI index indicator.
RSIOMA is the period on the basis of which the analysis is carried out; by default it is equal to 14; if the price movement speed increases, this indicator can be reduced.
RSIOMA_MODE – shows the mode in which the indicator operates.
RSIOMA_PRICE – base value of the price level.
Ma_RSIOMA – period indicator for calculating RSI
Ma_RSIOMA_MODE – mode.
Buy trigger – market overbought level.
Sell trigger – the market oversold level.
In addition, there are several less important parameters, their settings can be left at default.
Strategy for using the indicator
The RSI index indicator provides the ability to receive signals for opening and closing orders. Based on the data received, trading occurs as follows:
Buying is an exit from the oversold zone and the thick blue line moves upward. It is better to make transactions not at the very beginning of the movement, but only after you have made sure that the price confirms the indicator readings.
Sell – the blue line begins to move downwards and leaves the overbought zone.
Also, observing the indicator lines, we can conclude that the closer the blue line is to the top, the higher the probability of a downward trend appearing, and vice versa, as it approaches the bottom, the higher the probability of an upward trend appearing.
This rule can serve as an additional guideline when opening new or monitoring existing positions.
You can move significant levels as desired, thereby decreasing or increasing the number of input signals. The more signals generated during program operation, the higher the risk of errors.
