If you have been in the field of trading for a while I bet you must have heard about the RSI indicator.
The RSI indicator or you can call it the Relative Strength Index is one of the most popular and widely used indicators that help traders to identify upcoming bullish or bearish trends plus reversals.
What is the RSI Indicator?
The RSI indicator is a momentum oscillator that measures the speed and change of price movements.
The indicator is calculated by comparing the average gains and losses of a security over a certain period of time.
This indicator is made from the composition of overbought and oversold levels plus a moving average line that oscillates between these two levels.
How to Use the RSI Indicator on Binomo
The RSI or Relative Strength Index indicator is available on the Binomo trading platform, and you can find this indicator in the trend section of the indicator list.
To access the RSI indicator on Binomo, follow these steps
Firstly, Log in to your Binomo account. In case, you don’t have one click here.
Secondly, select set your default chart to candlestick and open the chart
Next, Click on the “Indicators” button in the lower-left corner of the chart
Select “RSI” from the list of indicators
Adjust the settings of the RSI indicator according to your preference and once you are done click apply.
RSI Trading Strategy: How to place Trades using the RSI Indicator?
Placing trades using the RSI indicator is very easy you can even place calls while drinking a sip of coffee. You just need to look for the moving average line that oscillates between the overbought and oversold levels.
When the moving average line is oscillating near the oversold level (line 20) you can consider an upcoming bullish trend similarly when the moving average line is oscillating near the overbought level (line 80) consider an upcoming bearish trend.
Given above is the 15-minute chart of GBP USD and we can clearly see the moving average line oscillating near the oversold level here you place a buy trade for 10 – 15 minutes.
Similarly, Given above is the 15-minute chart of GBP USD and we can clearly see the moving average line oscillating near the overbought level here you place a sell trade for 10 – 15 minutes.
RSI Divergence
You can also use RSI indicator divergence to place trades. RSI divergence occurs when the indicator line is moving in a different direction than the price of the asset.
The divergence usually means a potential reversal in the trend and you can use this opportunity to place trades accordingly.
Try the RSI indicator on the Binomo trading platform for free. Click here to Sign up for free now.