ForexEzy
No Result
View All Result
  • Home
  • Getting Started with Forex
  • Forex Education
    • Forex Basics
    • Forex Trading Strategies
    • Money Management
    • Risk Management
    • Technical Analysis
    • Fundamental Analysis
    • Trading Psychology
    • Social Trading
    • Automated Trading
  • Forex Tools
    • Forex Robots
    • Forex Indicators
    • Forex Signals
  • Top Forex Brokers
  • Top Forex Robots
  • Commentary
  • Blog
  • Home
  • Getting Started with Forex
  • Forex Education
    • Forex Basics
    • Forex Trading Strategies
    • Money Management
    • Risk Management
    • Technical Analysis
    • Fundamental Analysis
    • Trading Psychology
    • Social Trading
    • Automated Trading
  • Forex Tools
    • Forex Robots
    • Forex Indicators
    • Forex Signals
  • Top Forex Brokers
  • Top Forex Robots
  • Commentary
  • Blog
No Result
View All Result
ForexEzy
No Result
View All Result
Home Forex Education Forex Trading Strategies

How to Use the RSI for Intraday Trading

by Tim Baudin
September 8, 2016
in Forex Trading Strategies
0
How to Use the RSI for Intraday Trading
0
SHARES
11
VIEWS
Share on FacebookShare on Twitter

Below video goes over a Relative Strength Index (RSI) strategy for day trading.



How to apply the RSI indicator with Moving Average for Metatrader 4

The strategy in the video uses the 5-minute chart of Tata Motors. We’ll use the 5-minute EUR/USD chart, so open a new blank 5-minute chart of this currency pair.

Next step is relatively easy, go to Insert > Indicators > Oscillators and pick the Relative Strength Index. You’ll be presented with the screen below. Now use the settings exactly as shown in the picture below, pick a 7 period RSI applied to the close price.

Using RSI Indicator to trade currency

Now go to the levels tab. Usually, the default levels for the RSI trading indicator are set at 70 and 30 but this strategy uses 80 and 20 instead, so change the default values like shown on the picture below and click OK.

How to Use the RSI for Intraday Trading

You’ve now applied the RSI, in the next step we will apply the Moving Average to the RSI.

How to Plot an Indicator to another Indicator in Metatrader 4

To apply the Moving Average to the RSI is a bit tricky in MT4. In fact, even many seasoned users of the Metatrader 4 platform don’t know how to apply an indicator to another indicator.

First, you need to have your Navigator open, if it’s closed go to View > Navigator. Now go to Indicators and expand it so that you can see the Moving Average indicator.

You now SLIDE the Moving Average while holding your left mouse button and DROP IT to the RSI Indicator Window as shown in the picture below.

How to Use the RSI for Intraday Trading

After you successfully do this, you will be prompted to pick the settings for the Moving Average Indicator. Pick a 9 Period Moving Average and pick Exponential from the method tab.

IMPORTANT! In the APPLY TO FIELD pick Apply to First Indicator’s Data. If you use any other options here the Moving Average will just go to the main indicator window and not in the RSI window. Then click OK. That wasn’t so hard was it?

Unfortunately, the video gives little clues as so how you actually trade with this setup. The only clue is that once the RSI gets into an oversold zone, below 20, you should LOOK FOR a buy signal. The wording used implies that there is some discretion involved in the process which the video doesn’t go into. The exit is presented in a similarly vague manner. You should LOOK FOR an exit from the long position once the RSI gets over 80.

Below is a trade example on the EUR/USD 5-minute chart from March 22, 2013.

How to Use the RSI for Intraday Trading

The RSI gets below 20 and somewhere in the yellow area that I’ve marked on the chart you should be looking for a buy signal. Depending on where you got in, the entry price would be around 1.2895.

You look for an exit once RSI gets over the 80 level indicating an overbought condition. Again because of the subjectivity of the exit, your exit price would be around 1.2955. The total profit on this trade + 60 pips.

My Thoughts on the RSI System

The vagueness of the entry makes it hard to properly judge the validity of the system. But in general, the idea that this system presents is very old and widely used. The default use of the Relative Strength Index is to look for overbought and oversold market conditions so this system is nothing revolutionary. The more stringent entry conditions of using 80 and 20 as the overbought and oversold levels instead of the usual 70 and 30 should provide less false signals, but this will probably also lead to fewer signals overall.

The smoothing of the RSI with the 9 Period Exponential Moving Average should also provide some way of filtering bad trades, at least, I assume this is the case since the author in the video didn’t expand on the way he uses the Moving Average.

In my opinion, to make this system profitable a great deal of discretion will be needed. Overall something to try if you’re trading the smaller time frame charts like the 5 minute, but not anything groundbreaking.

ShareTweet
Previous Post

What is a Carry Trade & Forex Carry Trading Strategy

Next Post

Using Bollinger Bands to Improve the RSI 5 Minute System

Related Posts

ADX+RSI: The Unbeatable Forex Trading Strategy

ADX+RSI: The Unbeatable Forex Trading Strategy

by Chintan Patel
January 18, 2021
0

In order to pile up profits in the Forex market, you should choose a strategy that is backed by statistics....

An Introduction To Forex Trend Indicators

An Introduction To Forex Trend Indicators

by Adam Stanley
January 13, 2021
0

The trend is your friend’ is an old and popular expression in the financial markets. Consistently identifying the trend is...

Using Band Trading Strategy for Profits

Using Band Trading Strategy for Profits

by Adam Stanley
November 5, 2020
0

What is band trading? Do markets trend about 15 % of the time only?  So, what to do during the...

4 Forex Strategies Based on Trading Style

4 Forex Strategies Based on Trading Style

by Richard Brase
October 7, 2020
0

The foreign exchange market is the largest financial market in the world, where many have amassed fortunes just by playing...

5 Moving Averages Trading Strategies to Profit from the Markets

5 Moving Averages Trading Strategies to Profit from the Markets

by Adam Stanley
June 11, 2020
0

The name “Moving Averages” is self-explanatory and refers to the average ”moving” with each price period. Among the multiple moving...

Load More

Best Forex EA

  • ROFX 9/10
  • Forex Fury 8/10
  • FXgoodway 7.5/10
  • Z Trader FX EA 7/10
  • Forex Incontrol Reborn 6.5/10

Popular News

  • The Best RSI and CCI Combination Trading Strategy for Optimum Returns

    The Best RSI and CCI Combination Trading Strategy for Optimum Returns

    2 shares
    Share 2 Tweet 0
  • Rofx Review – High Profitability and Stable Performance Analysis

    29 shares
    Share 29 Tweet 0
  • The Best Forex Scalping Strategy – Using 3 Popular Technical Indicators

    0 shares
    Share 0 Tweet 0
  • The Best MT4 Indicators & Expert Advisors For Forex Trading

    2 shares
    Share 2 Tweet 0
  • How to check if the indicator is repainting?

    2 shares
    Share 2 Tweet 0

Trading

Footer

We are dedicated to demystify the world of forex trading for you – no matter what level you are on.

Categories
  • Automated Trading
  • Day Trading
  • Forex Basics
  • Forex Brokers
  • Forex Education
  • Forex Forecasts
  • Forex Indicators
  • Forex Market Commentary
  • Forex Robots
  • Forex Signals
  • Forex Tools
  • Forex Trading Strategies
  • Fundamental Analysis
  • Money Management
  • News
  • Risk Management
  • Social Trading
  • Technical Analysis
  • Top World Traders
  • Trading Psychology
  • Uncategorized
Tags
arbitrage atr bollinger bands cci chart patterns classics copy trading courses day trading forex brokers forex charts forex ea forex education forex forecasting Forex Indicators forex software reviews grid trading hedging ichimoku macd market cycles news trading oscillators price action trading rsi social trading strategies tips & tricks trading bots trading platforms trend trading Video
  • Terms of Use
  • Privacy Policy
  • Compensation Disclosure
  • Risk Disclosure
  • About Us
  • Contact Us

Copyright © 2020 by ForexEzy.com

No Result
View All Result
  • Home
  • Getting Started with Forex
  • Forex Education
    • Forex Basics
    • Forex Trading Strategies
    • Money Management
    • Risk Management
    • Technical Analysis
    • Fundamental Analysis
    • Trading Psychology
    • Social Trading
    • Automated Trading
  • Forex Tools
    • Forex Robots
    • Forex Indicators
    • Forex Signals
  • Top Forex Brokers
  • Top Forex Robots
  • Commentary
  • Blog

© 2020, Forexezy.