So over the weekend i was researching other indicators and came across the RSI indicator (relative strength indicator) and i have learnt alot so i decided to apply it to my most recent trade, backtest and just try and understand it some more. So from what I gathered and applying it to my current analysis, I can say that both the RSI and price of this pair are going in the same direction. If you look at the rsi and compare it to the price pathway, you can see that they are somewhat similar to one another. This is known as convergence (they are moving in the same direction). Overall this convergence would signal as an increase in bullish momentum and potential trend strength. So basically we should see a reversal soon and some upwards movement. Thankfully, this does not go against my current bias making me more confident that this trade will go in my favour but a close eye is still necessary. Generally, if the RSI is <50 we should see that price falls which is what is happening at the moment but i believe that will end once the area that I highlighted is met and the price meets the support line. In addition, if rsi begins to rise back above 50 then we can use that as an additional signal to buy this pair. So hopefully this goes to plan and I would highly appreciate it if you could comment your suggestions, criticisms in my analysis or aggreements as it will really help me with my learning :)
Have a good week all!
Have a good week all!
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oh and just ignore the numbers on the chart aha