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Date: 2017-03-02 21:50:14
Binary Options Review - RSI Trading Strategy (Relative Strength Index) - Binary Options
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While trading binary options on binary options or other binary options platforms, one of the most important, if not the most important indicator of them all is the Relative Strength Index (or the RSI as it is known) and basically probably there is no trader in this world that didn’t look at it at least once or tried to integrate it in the analysis while trading on binary options.
The RSI (relative strength index) is offered by all trading platforms either under the oscillators category or under the momentum indicators and the default RSI period to consider is the 14 period. This means the indicator is taking the last 14 candles and interpret the closing levels on it and based on that data is plotted.
Like any oscillator in binary options, the RSI or relative strength index is designed to show extreme levels, namely overbought and oversold levels, but it is important to note that RSI trading strategy strategy works best on binary options with markets that are consolidating, namely markets that are in a range. To find such areas in binary options, one should trade patterns that are most likely to be followed by ranging conditions but also it is possible to identify ranges when looking at the trading session you are interested in trading on binary options. For example, in terms of Elliott Waves Theory, an impulsive move has two corrective waves (ranges) that are following impulsive moves of a lower binary options degree.
Another thing to consider when looking for RSI (relative strength index) ranges is to trade binary options in Asian session as in the Asian session markets are not moving much due to lack of liquidity and the fact that European and North American sessions are more price action packed. Therefore, trying to identify overbought and oversold levels based on a range might work very well as the RSI (relative strength index) is giving these levels for finding the perfect striking price for your option on binary options.
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Risk Warning: Please note that binary option trading entails substantial risk of loss, and may not be suitable to everyone. Trading could lead to loss of your invested capital.
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