Relative Strength Index (RSI) Forex Strategy

The Relative Strength Index (RSI) forex strategy is a currency trading strategy that is designed to measure change in price movements along with their speed.

The strategy combines the buysell5secret custom indicator along with the Relative Strength Index (RSI) MT4 indicator.

Chart Setup

MetaTrader4 Indicators: buysell5secret.ex4 (default setting), Relative Strength Index.ex4 (RSI) (default setting)

Preferred Time Frame(s): Any

Recommended Trading Sessions: Any

Currency Pairs: Any forex pair with low spread (max 6 pips)

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Download the Relative Strength Index (RSI) Forex Strategy

Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Enter a buy in the market if the following holds true:

  1. If the Relative Strength Index (RSI) MT4 indicator moves above the 50 level as seen on Fig. 1.0, an uptrend is confirmed i.e. a buy signal.
  2. If the buysell5secret.ex4 custom indicator forms a blue upward pointing arrow on a blue line within its indicator window and a corresponding one that is aligned below price bars on the chart window, it denotes a bullish trend.

Stop Loss for Buy Entry: Place stop loss below support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit on position(s) if the following rules or conditions hold way:

  1. If the Relative Strength Index (RSI) MT4 indicator moves below the 50 level, an exit or take profit is confirmed. If the RSI is above the 70 level and dips, breaking below the 70 level, some traders tend to use this limit as an exit or take profit trigger.
  2. If a red downward pointing arrow is formed above price bars on the chart and a corresponding one is formed within the indicator window, an exit or take profit is advised.

Sell Entry Rules

Initiate a sell order based on the following statement:

  1. If the DodgerBlue line of the Relative Strength Index (RSI) MT4 indicator moves below the 50 level, a sell is triggered.
  2. If a red downward pointing arrow of the buysell5secret custom indicator is formed above price bars on the chart and a corresponding one is formed within the indicator window attached to a yellow line, it confirms a sell in the market.

Stop Loss for Sell Entry: Place stop loss above resistance.

Exit Strategy/Take Profit for Sell Entry:

Exit or take profit on position(s) if the following holds true:

  1. If the DodgerBlue line of the Relative Strength Index (RSI) MT4 indicator breaks above the 50 mark, it is a trigger to exit or take profit.
  2. If the buysell5secret custom indicator displays a blue upward pointing arrow within its indicator window and on the chart, while sell order(s) are in place, it indicates a reversal signal i.e. an exit or take profit should be considered.

Fig. 1.1

Free Download

Download the Relative Strength Index (RSI) Forex Strategy

About The Trading Indicators

The Relative Strength Index (RSI) is a momentum oscillator that was developed by J. Welles Wilder to gauge the speed and change of price actions.

The RSI indicator oscillates between zero and 100.

When the indicator is above 70, it is tagged overbought and when it is below 30, it is said to be oversold.

Designed by a German by name Karl Dittmann, the buysell5secret custom indicator deploys a triple alert system to confirm a signal i.e. an arrow in the chart window, color change on the indicator line and another arrow attached to the line indicator within the indicator window.

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