2 sure-fire forex trading strategies

RSI and spread betting

RSI or the Relative Strength Index is a Forex Technical Indicator which is used quite frequently by forex traders. Usually used in conjunction with other technical indicators the RSI is the normalized ratio of the up moves to the down moves. The formula for calculating RSI is the average up moves for x periods divided by the average of down moves for x periods. The value of x is set by the trader. The value of RSI is expressed in the range of 0-100. It oscillates meaning that it’s exclusive of the price data but plotted on the same chart and the value oscillated between 0 to 100.

The RSI is gives the indication of an overbought or oversold market and the market momentum to keep moving in the same direction. When using the RSI the two figures to remember are 75 and 25. If the RSI moves above 75 it is indicative of an overbought market where as an RSI that moves below 25 is indicative of an oversold market. In both cases a trend reversal can be expected. The RSI helps the forex trader to determine his next move.

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