The video discusses the use of the RSI, a popular indicator in Forex trading, with a 70-75% accuracy rate. The RSI comes with levels and can be used to make buy/sell entries. The video offers packages for basic and advanced traders and encourages traders to understand technical and fundamental analysis. The video also includes a back test of the RSI on GBP/USD, which yielded profitable entries. The video concludes by encouraging traders to subscribe to the channel for more indicators to choose from based on their preferences.

The Power Behind RSI Indicator for Forex Trading

Introduction

For those who are new to Forex trading, it can be overwhelming to keep up with all the technical indicators and analysis out there. However, as a professional or advanced trader, understanding technical analysis and fundamentals analysis is essential to become successful. In this article, we will dive into the RSI Indicator, which is considered one of the simplest indicators to use in the Forex market.

What is RSI Indicator?

RSI or Relative Strength Index is an oscillator that measures the strength of a currency pair’s price movements. The RSI indicator measures the comparison between the average price gains and the average price losses in a specific period to indicate whether it is overbought or oversold. The RSI typically moves between 0% and 100%, where 70% and above indicates overbought while 30% and below indicates oversold.

How to Use RSI Indicator to Enter Trades

By using the RSI indicator, traders can enter trades based on the signals it generates. If the candlesticks’ price touches or drops below 30%, traders can look to buy. If it hits 70% or above, traders can sell. One of the biggest advantages of the RSI indicator is that it provides insights into momentum changes of an asset in a short amount of time.

Installing RSI Indicator on Your Chart

Installing the RSI on your chart is straightforward. To add the RSI Indicator to your chart, follow these steps:

1. Open the chart you want to add the RSI Indicator to

2. Click on Insert on the menu bar and select Indicators

3. Click on Oscillators and select RSI

4. Adjust the settings to your preference, leave the default setting (14 periods) if you’re unsure

5. Click OK to add the RSI to your chart

Why RSI Indicator Works

The RSI indicator works because it provides traders with a clear method of entry and exit signals based on a currency pair’s momentum. While there’s no 100% accurate indicator, traders can use the RSI to give them a higher probability of trading success.

Backtesting with RSI

Backtesting with the RSI Indicator is vital in evaluating its effectiveness. As shown in our backtesting example in this article, the RSI is 70% to 80% accurate. Therefore, entering 10 trades with the RSI and having eight of them successful, is a satisfactory result.

Conclusion

In conclusion, the RSI Indicator is a simple yet effective tool that traders of all levels can use to enter and exit the markets. By having a clear understanding of how the RSI works, traders can build a strategy based on this oscillator. Some traders may prefer to use multiple indicators along with the RSI as part of their trading strategy. However, as a beginner or advanced trader, using the RSI indicator can give you a solid foundation and a higher chance of trading success.