This video discusses why the RSI indicator is a terrible option for Forex charts, despite its popularity. The RSI is outdated, created for stock trading and not forex, and doesn’t account for the fact that currency pairs can go as high or low as they want until a government entity intervenes. While the RSI is easy to use and popular, following the crowd in forex can lead traders to lose money. Big banks can manipulate the market and take the opposite position of popular forex trends, leading to losses for traders.

Why the RSI Indicator is Not a Good Option for Forex Charts

Introduction:
– Explanation of RSI indicator photo
– Referring to previous ATR and Dirty Dozen videos
– Purpose of this video: to explain why RSI is a bad option for Forex charts

The Dirty Dozen:
– List of top 12 tools used by Forex traders
– RSI is the first item on the list
– Guarantee that everyone watching is using at least one of those tools

The Faulty RSI:
– RSI was created in 1978 for stock trading
– Forex trading did not exist at that time
– In forex, things cannot be overbought or oversold like in stocks
– Currency pairs can go as high or low as they want until a government entity intervenes
– Age, purpose, and function of RSI make it a bad indicator for Forex charts

Reasons for Using the RSI:
– People use RSI because it is easy to use: wait for line to cross 30 or 70
– RSI is extremely popular, with 25,000 searches on Google every month
– Following the crowd leads to being part of the 99% of Forex traders who lose money or breakeven
– Big banks take advantage of popular indicators by moving prices the other way, pushing traders out

Why RSI Is a Bad Option for Forex Charts:
– RSI has a lag time, making it a poor predictor of trends
– Traders using RSI rely on only one indicator, which is a flawed strategy
– RSI signals are not accurate due to false positives or false negatives
– RSI ignores important price and volume data that affect market trends
– The RSI is only effective under certain market conditions, which makes it unreliable overall
– RSI signals risk causing traders to enter or exit positions at the wrong times, leading to losses

Conclusion:
– The RSI is not a good option for Forex trading due to its flaws and limitations
– Traders should consider using multiple indicators to get a more accurate understanding of market trends
– Discouraging use of RSI to help traders make better decisions and minimize losses.