RSI (Relative Strength Index)

RSI (Relative Strength Index)

RSI also helps to determine the overbought/oversold state of the market to buy low and sell high. The readings of the indicator fluctuate between 0 and 100. If RSI rises above 70 bound, it means that the pair is overbought. If RSI falls below the 30 line – the currency pair is oversold. Moreover, as with MACD, a divergence between RSI and price may warn of the market's reversal.

The indicator may be also used during a trend to determine the best levels to enter and exit the market. In this case, you should trade only in the direction of the trend, when the indicator leaves critical levels. For example, you can buy during an uptrend when RSI gets above 30. During flat (sideways) market, you may use RSI signals as buy/sell signals. 

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