|Welcome to currency trading with Profiforex!
Subsequently, the window in which we change the indicators properties appears.Here we can choose the period of averaging and the method, fix the maximum and minimum, and change visualization settings.
When we're choosing the method, we specify the prices to which the indicator will apply.These are open prices, close prices, maximums, minimums and their different combinations.
In classic literature, the relative strength index is described as "a price-following oscillator,which ranges from 0 to 100
and signalizes about market tendency to change the trend when RSI is high (close to 100%)
or low (close to 0%)."
The indicator is calculated in the following way:Where RS is CU -the average number of positive price changes.CD - the average number of negative price changes. Delta - the average price change.
The classical advice to use this indicator sounds like this:When the index goes above the upper auxiliary line the bulls power is high, but the market is overbought and ready to enter the selling stage.
Contrastingly, when the RSI goes below the lower auxiliary line the bears power is high, but it should be noticed that the market is oversold and the buying process begins.