Forex Stock Exchange Forum
Would you like to react to this message? Create an account in a few clicks or log in to continue.
Forex Stock Exchange Forum

Forum About Trading on Forex,Stock,Binary Options, CryptoCurrency and NFTs

Thor Expert Advisor

You are not connected. Please login or register

Trend RSI (VertexFX Indicator) Trading strategy

Go down  Message [Page 1 of 1]


Trend RSI is a modified version of the classic RSI indicator. It smooths the price with a moving average before calculating the RSI. Then it applies a factor of ATR in smoothing out the RSI values. The plots are like classical RSI indicator. The yellow line is the Trend RSI value and the dotted line is the signal line.  Trend RSI can be used as the normal RSI indicator. The difference is trend RSI indicator removes many whipsaw signals associated with the RSI.
Trend RSI value above 80 is considered as overbought and value below 20 is considered as oversold conditions in the instrument. Some traders use 70 30 levels. In a consolidation, the overbought oversold levels signal reversal. In strong trends, overbought oversold levels mean a temporary pause in the trend before continuation.

[You must be registered and logged in to see this image.]

Some traders use Cross over between Trend RSI and its signal line can be used as signals. When a cross down happens sell positions can be opened. When up crossover happens buy positions can be opened.  However, trades taken in the long term trend direction works best with this strategy. Another method is the divergence between price and Trend RSI. When price makes new lows, but Trend RSI fails to make new lows, buying is suggested. Price makes new highs, but Trend RSI fails to make new highs, selling is suggested. When divergence happens, it more likely that the prevailing trend will reverse direction.
RSIPeriod – RSI Period
EMAPeriod – Smoothing MA Period for Price
ATRPeriod – ATR Period
K – Smoothing Factor


Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum