With due practice, traders can hone their skills and use the RSI indicator to trade forex. However, trading a range market can be very risky as price often tends to move into the accumulation phase. Traders can often end up getting trapped due to fake breakouts, which are a common occurrence with the RSI indicator.
The Bollinger bands and RSI strategy can be used as a simple way to enter a trade right before volatility expands. The simplicity of this trading strategy is that it can be used on time frames of H1 and H4. This makes the strategy easy to follow up, especially for day traders.
This strategy uses two Exponential Moving Averages (EMA), one with a period of 7, the other with a period of 26; Relative Strength Index (RSI), with a period of 14, which is used as default in MetaTrader 4; and the Moving Average Convergence Divergence (MACD) indicator with parameters 12, 26, 9.
This strategy is based on the three most popular indicators - Stochastic, RSI and MA. These indicators, if used properly, do not only provide a high percentage of correct signals, but may be used as different market filters for each other.
A strategy for professionals in technical analysis who can implement MACD, RSI and MA indicators in their daily trading.
It is a simple strategy with using Relative Strength Index or RSI indicator - the divergence of the market can be found.
Learn to trade binary options with RSI and EMAs indicators – you can make good profits if you trade wisely.