Venture veterans opine, if money management is 50% of successful trading, the other 50% is dependent on entry/exit points. No matter how good a trading strategy you own, it is all a waste if you are not able to decipher your trading entry and exit positions. Yes, you may ask- how is it possible! Your indicator tells you about possible currency value appreciation/depreciation, that too in real quick time. Well, the answer is it does not just about know about price fluctuations, it is also about knowing when it is going to happen. For that experts suggest using Forex Entry point Indicator.
Relative Strength Index- a good trade entry instrument:
To be a good Forex trader, you will have to be bang on when it comes to maintaining or better yet abiding proper trade timings.
Every tick of time results in a new figure or variable which needs consideration. And so knowing about the right trade timing is extremely pivotal. With the help of some Entry trade point technical indicators, traders easily figure out the time of trade to concentrate on.
If you are trading with EUR/USD, and want to base your trade entry using technical market analysis instruments, RSI- Relative Strength Index as a good entry Forex indicator. Simply use a 5-Day RSI to find out entry and exit points. Simply look at the previous market scenario and currency behavior.
As per experts, the RSI 5-minute strategy is one simple option. The trade initiates when RSI 5 crosses below 30. And then starts moving over the 30 point. As it surpasses this point, experts suggest traders to enter into their trades and hold it till RSI crosses 80.
Then if you come across the RSI moving downwards from this 80 point mark, you ought to Sell off your currency pair. (This is also applicable when trading stocks)
Another way of using it:
Taking up the same scenario, experts state traders another way to use this Forex entry point indicator. That is to sell if off before it reaches the 80 point.
The reason being sometimes it may occur in trade charts that Resistance area indicates that the price would not even reach up to 80. Henceforth hitting the Sell trigger right when it touches the Resistance level is also a smart way to determine trade entry.
So there you have it a good entry Forex instrument along with a strategy including it. Do make use of it and if possible go through some tutorials about each of these instruments. It’s always useful to know the basics of indicators before putting it to usage.
Try Demo trading with this strategy:
Now that you have a clear idea about one good Forex Entry Point Indicator and its strategy do demo trading. Under real time trading situation, you can use this strategy, plot it out on your chart and watch RSI movements. Then depending on these mentionable situations, you can enter into a Buy or Sell trade order. Backtesting it would also enable you to get an idea of how it actually works. And if it is easy enough for you to read! So find a broker now and do the deeds right away.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.