The Australian Exchange foreign exchange platform teaches you the RSI indicator limit reversal rule and its application

RSI limit reversal ruleIt is a principle of extreme inversion, also known as the "RSI limit reversal signal". The key to the use of the RSI indicator is not the number of approaches, but the degree of control over the signal. The key is how to catch this correction time.

In the technical analysis of foreign exchange gold trading, any indicator does not exist independently. It often requires a combination of two or more technical indicators to make a comprehensive judgment. Although the probability of a signal that meets this condition is less, the success rate is higher. Therefore, combining the pressure support of the Bollinger Bands and the judgment of the K-line when it is sideways will allow us to more accurately grasp and use RSI signals.

RSI limit reversal application conditions and rules：

Condition 1 - It must be combined with other technical indicators to jointly analyze the trend of the foreign exchange market (such as Bollinger Bands, etc.), and the K-line passes through the upper or lower tracks of the Bollinger Bands.

Condition 2 - The RSI value is crossed by 90 lines or 10 lines, and the line reaching the limit value of the RSI must be a straight line without radians (V-shaped or inverted V-shaped).

The above two conditions need to occur at the same time. The farther the K-wire passes through the upper rail of the Bollinger wire, the better. At the same time, the order will be placed immediately after the acute angle reversal occurs after the RSI breaks down 90/10.

Notes on the use of RSI limit reversal:

If the cycle of the RSI is adjusted lower, the more sensitive the RSI index is, and it will be easier to reach overbought and oversold values. However, when trading the RSI signal, special attention must be paid to the "passivation" phenomenon of the RSI, otherwise you may face large losses. When the candle is in the shape of a small broken stick approaching the high and low values of the RSI again and again, you should wait and see at this time and avoid trading on the release time of major economic indicators.

(1) The RSI ultrashort period should be set to 3, the short-term period should be between 3 and 6, and the long-term period should be between 10 and 14.

(2) Suitable for short-term transactions such as 1 minute and 5 minutes

(3) The exchange rate is in a sideways position

(4) Forming a very long K-line

(5) Rise to pressure level or fall tosupport level

(6) Avoid the publication time of major economic indicators

(7) Special attention must be paid to the "passivation" phenomenon of RSI to avoid losses

(8) Avoid candles in the shape of small broken sticks, and focus on watching at this time