What is RSI-Relative Strength Index?

   There are RSI-Relative Strength Indexes among the main indicators used in trading Forex market. It is followed frequently by traders due to ease of use and signal success. We will have desribe to you, what is RSI, how to used Rsi and how to interpreted RSI on the platform.

   The RSI (Relative Strength Index) is a display published by J. Welles Wilder in 1978. Basically, prices identify overbought and oversold territories and allow us to predict where they might go.

  This indicator, which is often used when performing technical analysis, is indicated by a line with a value between 0 and 100. It compares the prices of percentage, based on the figures between these two values by calculating between the overselling days and overbought.

   The use and interpretation of these values, which are automatically calculated in Forex Meta programs, is quite simple in terms of investors. We can easily interpret and understand the underlying rationale to gain profits.

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Features of the RSI indicator

   RSI; It is added on the platform as arranged according to the 14 day period. However, you can change these period values ​​according to your investment strategy.

   The index shows two numerical values ​​of 30 and 70. The indicator is interpreted according to the prices that occur below or above these two values.

• Below the 70 level, indicating that prices may fall, giving a SELL signal
• The upward movement of the level 30 signals that the prices may rise, signaling BUY.

Interpretation of the RSI indicator

   We have said that the RsI indicator is successful in determining overbought and sell territory. Let's see how we interpret it now.

   The approach to the 70 levels of the demonstrator shows that there is a lot of purchases and that downward movement is possible from these points, progressing towards the level 30 of the show, there is a lot of sales and the upward movement is likely to continue.

   In order not to make mistakes in interpreting, it is necessary to read it correctly, observing the graph well.

   If prices go above 70 line, if you enter the sales transaction by thinking about approaching the excessive buying area, you may see damage if the increase continues.

   For this reason, waiting for a period of time over the 70 line and waiting breaking the 70 lines of prices again to watch the sale process will be more correct behavior. The same applies is to decisions of buy below 30 lines.

   This indicator, which is easy to use, is often preferred among investors because it provides easy-to-understand and accurate estimates.

   In addition to the lines 70 and 30, you can also specify the level 50, which is the midpoint. To do this, right-click on the indicator with the mouse, select RSI properties, then scroll down to the Levels tab and type 50 in the Add column.

  You can get a new transaction decision by seeing the average level of the price on this page and you can have a better idea of ​​the exit point from the current transaction.

   As we have said in our previous writings, it is not right to make use of a single indicator or diver when making a decision. It is absolutely necessary to monitor more than one indicator, economic data, news and evaluate the transaction accordingly. Indicators may only give you an idea of ​​the possible course of action, but they do not guarantee any profit rate. 

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