HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
XM information and reviews
XM
86%
NordFX information and reviews
NordFX
86%

Relative Strength Index


Relative Strength Index


The Relative Strength Index (RSI) is an oscillator that measures a particular financial instrument’s current relative strength compared to its own price history. The RSI should not be confused with relative strength which rates a financial instrument in relation to a market such as the S&P index.

The RSI is plotted on a vertical scale numbered from 0 to 100. The formula to calculate the RSI is 100-[100/(1+A)] where A is the average of the “up” closes over the calculation period divided by the average of the “down” closes over the calculation period. Recognia uses the popular 14-bar period in the calculation of the RSI. The “A” for a 14-day period is calculated by dividing the 14-day “up” close average by the 14-day “down” close average. An “up” close or a “down” close is defined as the absolute change in price from close to close.

Trading Considerations


The RSI sometimes shows more clearly than the price chart itself the support and resistance lines for a financial instrument. Failure Swings which are also known as support or resistance penetrations or breakouts can be detected by using the RSI. Failure swings occur when the RSI passes a previous high or falls below a recent low.

Divergences (when market trends go in a different direction than market indicators predicted, usually signifying the onset of a trend change) occur when the price makes a new high (or low) that is not confirmed by a new high (or low) in the RSI. Prices usually correct and move in the direction of the RSI.

A financial instrument is considered to be oversold when its RSI falls below 30 and overbought when its RSI rises over 70.

#source


RELATED

How to Pick the Most Reliable Forex Expert Advisor

It's natural for an ambitious Forex trader to strive to be into action all the time and utilize every opportunity to get profits. Unfortunately, it's physically impossible...

AMarkets presents a new tool: Trade Analyzer

AMarkets works every day to create the best trading conditions for its clients. To make your trading process easier, more convenient and even more profitable...

The Top 10 Forex Brokers With Tightest Spreads

One of the main rules of money management in Forex lies in taking the broadness of the spread into account when executing trades. Low spreads in Forex means...

Understanding ECN and STP Trading

Selecting a trustworthy and reliable broker is a fundamental step in your trading journey. Your trading platform should be your long-term partner, offering essential features and support...

Leveraged ETFs: Worth It or Not?

Leveraged Exchange-Traded Funds or leveraged ETFs aren't new to individuals or institutional investors. In fact, they're becoming one of the most popular types...

Speculating with CFDs

Typically short-term, speculative trades are generally coupled to major market events such as central bank interest-rate decisions and company results.

Forex Education: Does It Make Sense?

Work of any nature requires considerable effort, both moral and physical. Indeed, in addition to having to spend a considerable amount of time on theory...

Stock trading: Advantages of trading shares

Start trading global shares through circus platform, which is a modern and well-developed platform that can assist you in navigating the whole trading process...

Is the US market too expensive during COVID-19?

Global financial media have reported the "extreme cost" of the US stock market in recent days. In theory, this should be followed by an imminent collapse...

Choosing a Forex Third Party Signal Provider

When choosing a third party signal provider for your forex account you need to be careful. Here are a few tips and things to look for when making your decision...

Five Bitcoin Day Trading Setups to Help You Make Money

Day Trading is trading that moves fast. It involves making multiple trades in a market on a single day, quickly reacting to price fluctuations to make lots of small margins...

Advantages Of Using AMarkets VPS for FX Trading

VPS is short for a virtual private server and it’s widely used for trading in the financial market. The VPS hosting service will be especially useful for traders who prefer...

NEO Price Prediction: Invest or Skip?

NEO isn't the most popular cryptocurrency, especially when compared to Bitcoin, Ethereum, Tether and Ripple. Currently, it's ranked only 26th by CoinMarketCap in terms of market capitalisation...

NFP's Effect on Gold Prices

While the relationship between gold and NFP is not clearly defined, in the short term, it could serve as an indicator and a trading opportunity. Being one of the most...

How to invest in gold

Many investors are keen on the precious metals market. So many seem to be looking to buy gold - a time-tested, safe-haven asset - especially as COVID-19 continues...

Is it Still Smart to Trade in Precious Metals?

Is precious metal trading still traders’ choice? People have been putting value on precious metals since the beginning of time. The price of gold was $35 per ounce in 1971...

5 ways to get your strategy copied

Copy trading is one of the popular ways that allow professional traders to earn additional income on their trading by offering investors to...

What is TradeCopier? Complete Guide to Copying Smart

With such technological advancements taking place every day, forex trading could not have been left behind. One of the most anticipated platforms of the year...

Trading EURGBP on Brexit Uncertainty

Ask most established currency pair traders to pick between fundamental and technical analysis, and you'll often get a lengthy monologue

Applying VSA in Forex Trading: Everything You Need to Know

Tick volumes are one of the simplest options for VSA analysis Most forex traders are familiar with technical and fundamental analysis. There are several ways to use these two methods...

Vantage information and reviews
Vantage
85%
FP Markets information and reviews
FP Markets
81%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Exness information and reviews
Exness
76%
Just2Trade information and reviews
Just2Trade
76%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.