How to Setup Forex Trading Pattern
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Please change chart on Candlestics chart with period of 5 minutes
Please select Forex assets you want to trade
Please go to indicators list and select
Relative Strength Index
Please setup RSI indicator witch standard settings :
overbough : 70
Go again to indicators list and select Moving Avarage
Moving Avarage Indicator
Please setup moving avarege with settings:
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RSI & SMA 200 – One of the best Forex Trend Indicators
Forex traders are always looking for the best financial analytical tools or the best forex trading indicator to monitor the currency prices and exchange rate variations, as well as any signal, which correct identification, allows them to anticipate the next exchange rate price moving direction. Due to the fact that the forex market is highly volatile and speculative, several forex indicators have been developed and used for this task. Most successful forex traders used some combinations of forex indicators to increase the accuracy and certitude of their different signals and indications. The used in conjunction of two or more of the best trading forex trading indicator can increase their winning rate and trading profits exponentially by increasing their forex quote or exchange rate price anticipation certitude. The most popular, useful, and accurate combination of the best forex trading indicator is the RSI, SMA200 or the RSI + SMA 200, which is used as the golden key to forex trade profits and wealth by successful forex traders.
What is Relative Strength Index (RSI)?
The relative strength index or RSI is one of the best forex trading indicator. RSI is a momentum oscillator, which has been used as a trading indicator since 1978, when J. Welles Wilder, who was a successful forex trader, developed it. Welles was trying to create the easiest to use and most accurate forex trading indicator. The RSI evaluate the market and assigns a numerical value to it on a scale from 0 to 100. This assigned numerical value helps traders to identify and recognize the market momentum and understand the market trend for the studied period. The RSI forex trading indicator estimates the likelihood that an exchange rate will increase or decrease in a period. Essentially, the RSI is a forex indicator, which measures the strength magnitude and velocity of the price movement of a particular market generally in advance of the move (Wilder, 2013).
You can read more about Relative Strenght Index HERE!
What Is Simple Moving Average (SMA200)?
The simple moving average 200 or SMA200, is one of the best forex trading indicators, it consists of the simple average of the exchange rate closing price for the last 200 periods. The 200 periods can be fully customized for any 200 period’s intervals, or duration, e.g., previous 200 days, recent 200 4 hours periods, last 200 hours or minutes, etc. making this forex trading indicator one of the most widely used for its versatility. Most forex traders used the SMA200 forex indicator setting the closing price for the last 200 days to calculate it. The SMA200 forex indicator exposes if the exchange rate is increasing or decreasing on the studied market additionally, it identifies if there is any price trend and its direction. This forex trading indicator is used as guidelines for traders to invest on a call or a put or to buy the currency, hold or sell it accordingly to the current and immediate future market condition.
You can read more about simple moving average (SMA) HERE!
What is the RSI, SMA200?
The RSI, SMA200 is the simultaneously used of the two best forex trading indicators, the RSI + the SMA200 to anticipate with great certitude the next exchange rate. Each forex indicators confirm the other. The used in combination of both forex indicators increase the information delivery speed and the accuracy of their signals and call to action indications.
Understanding the RSI forex trading indicator
- The RSI forex trading indicator evaluates the forex market as an oscillator and assigns a value from 0 to 100 to the forex market condition.
- Every time the RSI forex trading indicator has a value equal or greater than 70, the currency is considered to be in an overbought state.
- Every time the RSI forex trading indicator has a value equal or lower than 30, the currency is considered to be in an oversold state.
- The RSI forex indicator index during forex trending periods can be maintained in either an oversold or overbought state.
- When the forex trading indicator RSI has a value equal or greater than 70, the currency market is overbought, therefore is likely that the market experience an imminent reversal producing that the exchange rate decreases.
- When the forex trading indicator RSI has a value equal or lower than 30, the currency market is oversold, therefore is likely that the market experience an imminent reversal producing the exchange rate to increase.
- The 70 and 30 assigned value of the RSI forex trading indicator can be adjusted to various levels, changing the forex indicator parameters to increase or decrease sensitivity, e.g., to 80 and 20.
- The RSI forex indicator is represented graphically in a price chart as two straight parallel lines, with the 30 value at the bottom and the 70 value at the top
- The RSI forex trading indicator slope is directly proportional to theforex market change in trend velocity
- The magnitude of the forex market exchange rate changes is represented by the distance traveled by the forex trading indicator.
Understanding the SMA200 forex trading indicator
- When the SMA200 forex trading indicator is rising or pointing upwards, the exchange rate is increasing; it might indicate the beginning of a price uptrend for the currency pair.
- When the SMA200 forex trading indicator is falling or pointing downwards, the exchange rate is decreasing; it might indicate the beginning of a price downtrend for the currency pair.
- The SMA200 forex indicator can be adjusted to any previous 200 periods or terms, allowing forex trader to use it for any maturity time.
- The SMA200 forex indicator has a high sensitivity to identify and anticipate a forex market reversal.
- The SMA200 forex indicator is used to set the resistance and supporting line on a candlestick exchange rate price.
- The SMA200 forex trading indicator is graphically represented as a line on a candlestick price chart and the different shapes of it make patterns with are repeated over time with similar market behaviors each time they are present. Those patterns have been described, which allows their identification, increasing the exchange rate price anticipation accuracy of this forex indicator by knowing in which direction the exchange rate will move.
Understanding the RSI, SMA200 the Best Forex trading indicator
· The basic principles of each forex trading indicator have to be considered separately to increase accuracy.
· The RSI forex trading indicator determines the overbought or oversold state for the currency pair and anticipates the next exchange rate moving direction
a) When the exchange rate RSI forex trading indicator is above 70, and the SMA200 signals an imminent reversal or the beginning, or consolidation of a downtrend. It indicates you must invest in a put since the exchange rate price will fall. The forex trader must sell the currency.
b) When the exchange rate RSI forex trading indicator is below 30, and the SMA200 signals an imminent reversal or the beginning or consolidation of an uptrend. It indicates you must invest in a call since the exchange rate price will rise. The forex trader must buy the currency or hold it.
· Each time the closing price or the last candlestick is at or above the line of the RSI forex trading value of 70. The currency is overbought. It calls to action to Invest in a put when RSI crosses his top overbought line, and SMA200 shows a downtrend.
· Each time the closing price or the last candlestick bar is at or below the line of the RSI forex trading indicator value of 30. The currency is oversold. It calls to action to invest in a put when The RSI forex indicator crosses his bottom oversold line and SMA200 shows uptrend
· The SMA200 forex trading indicator will be used to establish the likelihood of a price reversal or a change in the direction of the current exchange rate trend.
a) Each time during an upward trend, when the next exchange rate closing price is lower than the previous closing price, and it is located below the SMA200, or the candlestick bar fall at or below the line, which graphically represents the SMA200 forex indicator, the exchange rate will fall. It is a clear signal to sell the currency, or It calls to action to Invest in a Put, and it is confirmed when RSI crosses his top overbought line, and SMA200 is showing a downtrend. The exchange rate will decrease.
b) Each time during a downward trend, when the next exchange rate closing price is higher than the previous closing price, and it is located above the SMA200, or the candlestick bar is at or above the line, which graphically represents the SMA200 forex indicator, the exchange rate will rise. It is a clear signal to buy the currency, or It calls to action to Invest in a Call, and it is confirmed when RSI crosses his bottom oversold line, and SMA200 is showing an uptrend. The exchange rate will increase.
· When the closing price fall in the middle of the RSI forex trading indicator lines without indicating either an oversold or overbought state, the SMA200 line will determine the call to action indications.
· Before investing in a call following the signals of the RSI, SMA200 forex trading indicators, traders have to set the stop point or emergency exit in case they misread the information to avoid any monetary loss.
How to USE RSI, SMA200 the Best FOREX TRADING INDICATOR
1. Create a candlestick price chart with the exchange rate record of your selected currency pair
2. Use the standard color key for the candlestick price chart; green when the closing price is higher than the previous period and red when the closing price is lower than the last period.
3. Select the RSI forex trading indicator and apply a color key for each parallel line be sure the parameters are the assigned value of 30 for the bottom line and the 70 at the top
4. Select the SMA200 forex trading indicator and use a different color to distinguish it from the previous lines.
5. Do a technical analysis of them and identify the patterns and signals.
Open Buy Possition
When SMA indicator are showing UpTrend and RSI line cross oversold zone (red line) Than you have to invest in BUY
Open SELL Possition
When SMA indicator are showing DownTrend and RSI line cross overbought zone (green line) Than you have to invest in SELL
Advantages of Trading forex Using RSI, SMA200 the Best Forex Trading Indicator
Efficient way to present and summarize the market information, this forex trading indicators delivery all the price and market information in just seconds, incrementing the traders’ ability to manage several currency pairs simultaneously.
Self-confirming forex trading indicators, each of the forex indicator confirm the other avoiding the need to use indicators that are more complex during the technical analysis.
Easy to set and to read forex trading indicators, the combination of the RSI, SMA200 forex indicators is easy to understand with a fully customized color key and parameters’ settings to avoid any misleading sign or confounding patterns. They can be used on any price chart.
This forex trading indicators can be adjusted for evaluating any period or any maturity time
Call to action straightforward; the indications to buy or sell the currency or to invest in a put or a call are clear and easy to understand.
Price anticipation with great certitude Using both forex trading indicator the next exchange rate price moving direction can be anticipated correctly, and they both can help traders to identify a trend trading market or a reversal of an existing trend.
In a nutshell: the RSI, SMA200 the Best Forex trading indicator, they are used together as one forex indicator in technical analysis to anticipate accurately, the next exchange rate price moving direction. This forex indicator does not need any other confirmation since each one confirms the other. They both are represented graphically on price charts as lines, which help the traders to get information faster and easier using the previous exchange rate closing price position as a call to action signal. The RSI, SMA200 best forex indicator is an excellent instrument for forex trend trading since it can identify a new trend, an existing one, or the endpoint or trend reversal before the market moves in the anticipated direction. It allows forex traders to increase their profits by indicating them when to buy, hold, or sell the currency. Additionally, it has a clear call to action to Invest in a Put, when the previous closing price is below the SMA200 line, and it is confirmed when RSI crosses his top overbought line. On the other hand, it has a clear call to action to Invest in a Call, when the previous closing price is above the SMA200 line, and it is confirmed when RSI crosses his below the oversold line.
The RSI, SMA200 is the best forex trading indicator. This combination creates the most accurate, fast to read and easy to understand forex trading indicator and the best analytical tool for exchange rate anticipation. The predictive value could be up to 99 % when it is appropriately used, and the signals are read correctly. The forex trader indicator RSI, SMA200 is enough for most traders to make their trading choices and select buying or selling the currencies or investing in a Put or a call, accordingly to its indication.