Overbought or Oversold

[fxoday]

RSI indicator is the best tool to identify overbought or oversold zones. However it works only on high timeframes and on assets that don't exhibit strong trend properties like Gold which often ignores technical indicators due to pronounced fundamental events.

Gold is usually associated with the USD, when the dollar is stronger, the gold weakens, but the two are considered a safe haven, gold has proven to exist from ancient times, and the USD is the currency reverse in the world.

 

[sebking1986]

I personally like to use HTF to identify high and lows of the recent range and then it's a case of premium and discount pricing based on price location within that range.

 

[FriendlyFX]

That's key HTF to show directional bias , ranges within to trade buy when price is at discount that's what pullbacks are value points for traders

 

[momo3HC]

Usually, traders use RSI combined with another indicator like trend following indicator such as Moving average crossover.

Yep. The single problem with the MA`s are that they're lagging indicator.

 

[fxoday]

Yep. The single problem with the MA`s are that they're lagging indicator.

Yes MA lagging indicator, however many other indicators created based on MA

 

[John Ghidot]

MA works fine if it more than 60, daily trading is more safe and tech indicators are working better on H4, D1 etc

 

[Doudy]

the relative strength index (RSI) is a popular indicator

Certainly. I once had a strategy which implied RSI indicator and bollinger bands. In addition I observed the volumes and it helped me to conduct proper technical analysis. However, I understood that RSI indicators isn't so effective, because it repeats the movement of the price, but not predict the future changes. Anyway, traders still can use this indicator in case they understand that they shouldn't rely fully on it.
These days I stopped at patterns and figures. They seem to me more effective in case we are talking about fx trading on M5-M30 time frames. These are my primary ones and I trade them daily.

 

[Juanstevenson19]

The relative Strength Index (RSI) is helpful to measure the speed and change of price movements. I think It is one of the most widely used indicators to identify overbought and oversold.

 

[fxoday]

The relative Strength Index (RSI) is helpful to measure the speed and change of price movements. I think It is one of the most widely used indicators to identify overbought and oversold.

I also like this indicator, despite not always when the price entering an overbought or oversold zone level RSI, sometimes faces a false signal, always I use stop loss to protect

 

[kabir anand]

Overbought and oversold indicators can be helpful in identifying potential trading opportunities, but it's important to remember that these conditions are not always a reliable predictor of future price movements. Market conditions can change rapidly, and traders need to be prepared to adapt their strategies accordingly. Rather than relying solely on overbought and oversold indicators, consider using a range of technical and fundamental analysis tools to develop a well-rounded trading strategy. And always be prepared to adjust your approach based on market conditions and your own experiences.