Ihab Salloum[ad_1]
Have you been trading Forex with poor results? Maybe you have tried using auto-trading systems, EAs or other types of trading tools like trend lines, chart patterns, Elliott Wave, Fibonacci, even moving averages and price action but nothing seems to work. Many traders make the common mistake of going to the “Home Depot of Forex” and learning how all the tools work but never learn to use the tools in order to trade successfully.
I made that mistake early in my trading career spending over $5,000 dollars to essentially learn the basics of Forex. When I was finished I still didn’t know how to trade. Finally after much soul-searching and thinking about what really mattered in Forex I began to build a system based on those factors. Where I started was with a momentum oscillator called RSI, the Relative Strength Index.
RSI is perhaps the most used indicator by traders all over the world to determine if price is overbought or oversold. Ironically overbought and oversold can’t be measured using an indicator. Even more ironically divergences which are also touted as important trade signals for RSI are wrong. Divergences do not create reversal points, they signal retracement points with the exception of one situation, when RSI is in a positive range and momentum drives it to a negative RSI range.
Once a trader knows those two things about RSI, the doors to seeing trading for what it is will open. There are 5 things that make trading RSI a standalone trading system. If you know these things you will make money in Forex. They are understanding and locating Positive and Negative Reversals signals, understanding RSI Range, understanding RSI Range Shifts, Understanding Momentum Types 1, 2 and 3 and understanding the levels of predicting trading targets. When you combine this with statistical data on when momentum is most likely to occur you create a circumstance where trading successfully becomes a high probability event.
There is much to learn about RSI and the power it has to signal trades.
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