Multiple RSI Trader
One of the indicators that is used by the most profitable traders is called the Relative Strength Index – RSI. This is a technical momentum indicator that is adept at showing overbought and oversold conditions, which can give the opportunity for sharp and large reversals – perfect for binary traders.
RSI is a number from 0 to 100, calculated by the formula 100-100/(1+RS*). RS* here is the average of the lookback period’s up closes divided by the average of the down closes.
An RSI number of greater than 70 is normally considered overbought and a sign that a selloff is on the cards; a reading less than 30 is oversold and shows that a correction is imminent. See below for a picture depicting this.
At BinaryOptionsExplained.com, we take this already excellent signal and make it even better. We combine multiple RSIs with proprietary parameters to increase the reliability of the reading. Take a look at the picture below for an example:
The bar chart is daily EURUSD for the period of October to early November 2013.
Below are three RSI curves with different parameters. As you can see, all three peaked above the upper threshold of 70 before the pink line. Next thing you know, EURUSD dumped 3 big figures in 2 days!
If you are a subscribed member of BinaryOptionsExplained.com, then you would get an email saying: ‘RSI Signal indicates a SELL of EURUSD. Valid until conflicting signal is produced,’ and you could have then capitalised on this information.
Let’s look at another example, this time a buy recommendation for daily AUDUSD:
As you can see, the RSI indicator suite once again has extraordinary predictive power for the following 2 weeks (you can even see that after 2 weeks, the RSI starts peaking again, and hence the trend turns again!).
Here is a summary of the benefits of our RSI signal:
- High reliability and winrate thanks to our proprietary combination system.
- Applicable to all assets.
- Applicable to all timeframes.
- Easy to enter: signals are normally valid for long periods (if you sign up to the daily signal, for example, you will normally have more than a week to enter).
- Easy to exit: when the signal suggests the move has ended, we tell you so immediately.
Taking this classic trading technique and turbo-charging it has worked wonders for many traders – why not you?
