RSI MT4 Stock Indexes Indicator and Relative Strength Index Indices Trading Signals
The RSI indicator was developed by J. Welles Wilder.
The RSI is a very popular MT4 Stock Indexes Indicator and useful momentum MT4 Indices Technical Indicator. The RSI compares a Indices Trading magnitude of recent gains against its magnitude of recent losses and quantifies this information into a value that ranges between 0 and 100.
There are several popular methods of analyzing, some of which include:
Looking for divergences between the RSI and stock indexes price can prove to be very effective in identifying potential reversal points in stock indexes price movement. Trade long on Indices Trading Classic Bullish Divergence: Lower lows in stock indexes price and higher lows in the RSI; Trade short on Indices Trading Classic Bearish Divergence: Higher highs in stock indexes price and lower highs in the RSI. These types of divergence are often indications of an impending reversal.
RSI Overbought Oversold Levels:
The RSI can be used to identify potential overbought and oversold conditions in stock indexes price movements. An Overbought condition is generally described as the RSI being greater than or equal to the 70% level while an oversold condition is generally described as the RSI being less than or equal to the 30% level. Trades can be generated when the RSI crosses these levels. When the RSI crosses above 30 a buy stock indices signal is given. Alternatively, when the indicator crosses below 70 a sell stock indices signal is given.
RSI 50-level Crossover:
When the RSI crosses above 50 a buy stock indices signal is given. Alternatively, when the RSI crosses below 50 a sell stock indices signal is given.