Forex Focus | JAN 2009
Forex Focus: The RSI Miracle by Hadi Seyedinajad
Stocks & Commodities V. 27:01 (12-13): Forex Focus: The RSI Miracle by Hadi Seyedinajad If we had to choose just one indicator to tradethe financial markets, it would be J. Welles Wilder’s RSI. It does everything you expect from an indicator. It’s an overbought/oversold alert system, a convergence/divergence detector, and a momentum indicator, but it can do even more. The old saying amid radical technicians, that “the price chart has everything you need,” is not just a slogan. The information that we can extract from price vs. time data is amazing and I am not sure what this reflects, human intelligence or the harmony existing in the universe. By reading a price chart we must develop mathematical functions of price. These are tools to help us interpret the raw price data or extract hidden information such as momentum or market pace. There are different ways to measure momentum, each differing in their definition and calculation. The one that you have learned to interpret and that fills a gap in your market analysis would be the one you pick for your analysis. I have selected the relative strength index (Rsi), which, in addition to identifying overbought/oversold areas, detecting divergences, and identifying momentum, also linearizes a trend. Price tops or bottoms are not always in a relatively straight trendline. By looking at the Rsi, you’ll see that a perfect trendline often manifests itself. In this article I will present examples using the currency markets.
by Hadi Seyedinajad
Technical Analysis of STOCKS & COMMODITIES
The Traders’ Magazine since 1982
has had over 1,226,237 subscribers from 174 different countries.
37,000 Page Traders’ Archive for $89.99
To continue reading, sign-up for trial access to Traders.com and the S&C Archive — 37,000 pages of trading ideas!
After verifying your email address, you will have limited access to the S&C Archive, as well as access to a Digital Edition of S&C, and access to Traders.com Advantage and Working Money for 30 days.
Not a subscriber to Technical Analysis of
STOCKS & COMMODITIES magazine?
Click
here to subscribe, or request
a trial subscription.
Log-in now to view articles from the S&C Archive.
Your Subscriber ID is located at the top of your magazine label, highlighted here in red.
Your last name can be found on the second line, highlighted here in blue.
*If you have a company name on the label, that can also be used. It will appear below your name on the label.
If you do not have a Subscriber ID on your label, you can find it on your statement or renewal form.
For help locating your Subscriber ID number, please call us at 1-800-832-4642 or send an email to Survey@Traders.com. If sending an email, please include your name and mailing address.