RSI is a technical momentum indicator which compares recent gains to recent losses.
RSI attempts to determine overbought and oversold conditions of an asset.
It is calculated using the following formula: RSI = 100 - 100/(1 + RS)
RS is the average of the last x days up closes / Average of the last days down closes.
The chart below shows how the RSI for a forex pair ranges from 0 to 100. If the RSI value is greater than 70 the asset in question is considered overbought and if the RSI is less than 30 it is considered to be oversol.
A trader using RSI should be aware that large price changes will affect the RSI by creating false buy or sell signals, therefore RSI should be used as a complimentary tool rather than in isolation.
The FX Algotrader RSI Alert Plus Indicator for Metatrader includes a trader configurable audible alert system. This alert enabled RSI indicator is ideal for short or medium term traders who use the RSI as an overbought/oversold indicator.
The indicator has trader configurable input parameters which provide the following functionality:-
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Short term forex traders would benefit from enhanced asset selection when using MA crossovers. Products such as the Orion Index Analyzer, the Range Analyzer or the Generic Index Analyzer all help traders to optimize their forex pair selection and massively reduce the requirements to perform top down analysis on all the major pairs and crosses each day.
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