June 23, 2015

Using RSI indicator with Nifty

  • Trying to explain how New and experienced traders look at an indicator. 
  • First chart shows RSI reaching oversold zone Here new traders anticipate a reversal without seeing or confirming one Then Price makes a new low. New traders stop loss hits here and smart money makes a buy. If you see the second chart the oversold RSI trade did give profits but not before shaking out new traders.
  • Having Said that in a down trend if you Jump in on a new low thinking smart Money is going to come in your pain will increase as in a trending market the oversold or overbought condition sustain for a longer time. That's why you need to confirm reversals always with price action.

1 comment:

  1. Awesome.....looks simple and will cast an impression. Thanks