Discussing the article: "MQL5 Wizard Techniques you should know (Part 39): Relative Strength Index"
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Check out the new article: MQL5 Wizard Techniques you should know (Part 39): Relative Strength Index.
The RSI is a popular momentum oscillator that measures pace and size of a security’s recent price change to evaluate over-and-under valued situations in the security’s price. These insights in speed and magnitude are key in defining reversal points. We put this oscillator to work in another custom signal class and examine the traits of some of its signals. We start, though, by wrapping up what we started previously on Bollinger Bands.
Test runs with a wizard assembled Expert Advisor, for which there are guides here and here on how to use the attached code to create an Expert Advisor, we get the following results:
This traditional use of the RSI, like most oscillators, is not without flaws, as in trending markets the oscillator can remain above the 70 level for an extended period (when bullish) or below the 30 in bearish scenarios. This often implies this oscillator can be combined with other indicators like moving averages or even oscillators like MACD, in order to properly establish present signals. In addition, the customizing of these oscillator levels of 70/30 to say 80/20 could be suitable when dealing with highly volatile assets in order to avert premature opening of security positions.
Author: Stephen Njuki