6 IQ Option Trading Strategy Using the indicator RSI

6 Methods to Get Maximum Gain from RSI Indicator

Trading community de facto applies RSI indicator to define levels of overbuying/overselling levels on market. Even without use of additional filters, indicator works good. Possess a look on applying RSI that much more increase accuracy from the indicator.

Standard way to use RSI :

RSI signals

The very first, traditional way – buying option at this time when RSI exits the zone of overbuying/overselling.

• when the worth of RSI line gets less than overselling degree of 30% usually, bears force weakens and which means, the exit in an indicator using this zone is that the right time for them to open position for raising ;
• when values get above overbuying degree of 70% usually, one needs to think about variants of entering on downturn.

Buying option is definitely an operation strictly to become provided only by the instant when indicator exits overselling/overbuying zone.

RSI on minor timeframes 2nd way. In case you trade turbo options or binaries with expiration time lower than 30minutes, 70 and 30 levels not always allow to execute accurate enterings. Period ought to be decreased for indicator to attain its extreme values more frequent. For timeframe lower than hour one may usel RSI equals 5 and 90 to 10 or perhaps 95 to 5 levels.

Example of setting Rsi to 90/10 and 5 period :

3rd way. For additional approval you have to pay attention on higher period in an effort to begin to see the global trend. Trading binary options opposing the tendancy is that the bad idea, thus signal direction on current timeframe you above must match together.

That's how signal approve looks on 1 minute and 5 minute charts :

RSI on longer timeframe M5 approves signal on chart M1

Period and levels of RSI should match together on both charts.

4th way. There's scalping way of supershort deals. This trading method has been frequently applied by american traders. The feature from the strategy is to buy large level of signals during a little time period. The most goal usually is to absolutely minimize response time in an indicator.

Settings :

• RSI period equals 2 bars ;
• Overbuying limits will also be set maximally possible – 99 for overbuying and 1 for overselling.
• As usual, this strategy is applied on chart M1 or M5. Expiration time of binary option usually doesn't exceed 5 minutes.

RSI Divergence

5th way – looking for divergence on chart is an efficient approach to getting RSI signals. Divergence is really a dissimilarity between chart and indicator values, for instance once the chart draws higher and indicator shows lower maximum.

The example of divergence – two maximums on chart are on a single level during the indicator chart the next maximum is much higher :

The thing to remember – you have to trust exactly what indicator shows, if this grows – we buy option CALL, if this decreases – PUT.

The example of entering the positioning on the idea of RSI divergence :

entering the positioning on the idea of RSI divergence

RSI & Bollinger Bands

The final, 6th way – to combine RSI indicators and Bollinger Bands, because the very first one shows impulsive movements and the next shows the most direction of market movement. Consequently we calculate very precise signals on entering the positioning.

The rules of trading on RSI are fairly standard. Purchase PUT option by time indicator line exits the overbought zone, or CALL option, when indicator line exits the oversold zone. But one should enter only just in case the value is situated close to the main point of Bollinger Bands, which should become a filter. Ideally, the value should exactly overcross the line by the instant of receiving RSI signal.

Also read:

• Moving average trend indicator
• Alligator strategy iq option

Just in case of Сall signal, the value of opening the breakout candlestick ought to be above the line. The closing price above :

All a similar is true for PUT-signal, during this case the value therewith should simultaneously cross the highest line of the channel – Opening price higher, closing price lower (within the channel) :

The expiration time may vary counting on used timeframe. Ideally, the expiration time ought to be add up to amount of bars had the need to achieve the floating average (average line from the channel) coming from the edges from the channel. One may calculate the typical amount of bars had the need to pass the distance in one edge to a different and divide it by 2.

Conclusion

The foremost famous and widespread indicators can become the idea of profitable trading strategy if a person uses it properly. We discussed several easy ways of increasing the percentage of succesul deals through the standard RSI strategy. Attempt to use these methods on free practice account.

Traditional indicator became so merged straight into the trader’s lives, that a lot of just don’t consider them like the serious trading instrument. Simultaneously, the majority of more up-to-date developments are driven by same RSI or floating averages.

The main benefit of RSI is its versatility, this indicator might be applied on currency pairs, trade stocks or goods with equal success and without loss of quality.IQ Option best indicator

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