When you hold the rubber band loosely in your hand, the band is healthy. That’s kind of similar to the RSI indicator. What needs to happen? Well, that rubber band is either under so much pressure that it snaps OR it simply needs to move back to where it started to be healthy again. Just a little bit, then a little bit more, then a little bit more and then finally as far as you can pull it until one of two things happens… Now, let’s say you start to pull that rubber band on both sides. That would be considered a healthy rubber band. You don’t pull it or stretch it, you just hold it evenly. You pick it and hold it with your two hands, index fingers and thumbs. So Imagine you have a brand new rubber band right in front of you. Now before I begin sharing through example, it’s important to have a fundamental understanding of how this indicator works and why it works. Understanding the RSI indicator Like a Rubber Band: If you were to pull it up on any charting software (mine happens to be Tradingview) it looks like this The RSI indicator is an “Oscillator” or a numerical value given between 0 – 100 that indicates “Strength” or “Weakness” in a market. How To Use One of the Most Popular and Common Forex Indicators To Win More of Trades and Make More Money
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