Profitable Forex trading strategies includes your ability to observe Support & Resistance together with RSI Indicator as advised by Professionals at InstaForex Nigeria. This increases your chances of winning on every trades..
HOW TO OBSERVE SUPPORT AND RESISTANCE:
The support and resistance levels are key areas or zones; In MT4 charts in which traders look out for it enables them make accurate decisions as regards successful trading or in execution of their trades.
I) AT RESISTANCE LEVELS: Sellers are expected to come in more into the market thereby exerting a downward pressure on prices thereby forcing prices DOWN.
II) AT SUPPORT LEVELS: Buyers are expected to come in more into the market thereby exerting an upward pressure on prices thereby forcing prices UP.
At resistance levels prices might be retesting the resistance levels after a major uptrend thereby forming a channel.likewise after a major downtrend prices might be retesting the support levels thereby forming a channel.
Please note that resistance levels are not straight lines but an “area or zone” the same applies to support levels
PROFITABLE USE OF THE R.S.I INDICATOR:
The relative strength index(R.S.I) as the name implies enables the trader to determine the strength of the trends. It is better used with the default parameter.
Its applications are such that:-
If R.S.I is above 50 = BUY
If R.S.I is below 50 = SELL
If R.S.I is above 70 = OVERBOUGHT Which means that it started buying from Level 50
If R.S.I is below 30 = OVERSOLD Which means that it started Selling from Level 50
If the R.S.I is above 70 level it is said to have been overbought because it started buying from 50 and could remain at overbought level for days. If RSI is Less than 30 Level it is said to have been oversold because it started selling from level 50 and could remain at over sold level for days, This indicator is more stable when viewed at the bigger picture i.e on the daily time frame.
Please note that where level 50 is not on your indicator window, locate the horizontal line on your instaforex trading platform and drop it between levels 70 and 30. Double click on it and as soon as the white dots appear on the two extremes of the horizontal line, place your cursor on the horizontal line and then locate the 50 level accordingly
You can use the RSI technical indicator to create your own technical system.
This system will never work 100% of the time, but if they work 70% – 80% it should be enough. To further increase your chances of winning and reduce your probability of losing on every trade you can use fundamental analysis. I think that most traders choose one or the other but many traders use both.
Fundamental analysis is to trade the news.
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