Thursday, February 25, 2010

Using RSI To Trade Strong Trends In Stocks


I love using the RSI. I think it's a very under rated indicator. See this chart for how RSI can be used by swing traders to get on board a strong trend on orderly pullbacks to test the 20 day Moving Averages after RSI tags 70. Once RSI tags 70, this indicates extreme strength and hence high demand for a particular stock. So controlled or orderly pullbacks to the 20 day moving averages are likely to be reversal zones.

Happy trading!!

2 comments:

Anonymous said...

What is the RSI exactly?

Stewie said...

here you go!!

http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:relative_strength_index_rsi

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