RSI and Fibonacci

Forex strategy on the RSI and Fibonacci extension 1.618

Forex strategy is based on the method of harmonious trade, is based on the Fibonacci 1.618 and forex indicator RSI .

Let us consider a simple technique of applying Fibonacci extension 1.618 to move the price chart in conjunction with the indicator Forex Relative Strength Index - RSI (with levels 30 and 70), which must be installed on schedule POS Metatrader 4 .

Fibonacci ratio 1.618

projection is a significant 1.618 Fibonacci ratio, because it often indicates a depletion price movement . As soon as the market exceeds the level of Fibonacci extension 1.618, he often represents the extreme price action, which is very difficult to maintain for a long time. Once the design has been reached 1.618, which means that in this area on the graph formed trading opportunity for entry into the market. Since This Fibonacci level 1.618 is a price action, which is extreme and it is in this area may rapid emergence of a trend reversal in the market.

Relative Strength Index - RSI

As you probably already know from the technical analysis of forex - Relative Strength Index (RSI) is important enough oscillator , following the price, which ranges between 0 and 100. Forex Indicator RSI Relative Strength is often rises above 70 and falls below 30, which is equivalent to overbought and oversold levels respectively.

Bullish design Fibonacci level 1.618

Bullish design Fibonacci level 1.618 is very often happens in an emergency sale on the market. As soon as the market declines, price action tends to often get pereprodlennym. And that's the point of designing Fibonacci 1.618 tends to give traders a profitable opportunity for a deal on the market, because market as soon as the unfolding of this region, mainly providing a good strong trend.

Byche design Fibonacci extension 1.618

Bullish design Fibonacci level 1.618
Let's look at Example 1, after a sharp sell-as in the market formed an excellent intra-day extension Fibonacci 1.618.

Strategiya Forex RSI and Fibonacci extension 1.618

Example 1:

Note that preferable to use only the Fibonacci extension 1.618, which are formed during active market hours of the trading day (9:30 - 16:00 ET). In this case, the early sale provided a good spread in the market, and this was in turn confirmed the value of the oversold forex indekatora RSI, which was below the oversold 30.

Bear designing Fibonacci 1.618

Bear designing Fibonacci 1.618 is a highly significant Fibonacci ratio, because it is an excellent area for profit or for a deal to sell (short position). This level represents the Fibonacci extension 1.618 extreme price area in which very often occur trend reversals or setbacks. Once the price reaches a given level of Fibonacci, it faces considerable resistance in the market. And if it so happens, the direction of movement in the market often reverses.

Although the area of ??the Fibonacci 1.618 may be slightly exceeded. But it is important to realize that a move above this area will be a long hard Fibonacci support. 1.618 Fibonacci level in combination with an indicator forex RSI is an extremely effective tool for finding good deals . Therefore, it is important to carefully monitor the behavior of the market in this area and always be ready to open trading positions are up for sale.

Let's look at another example:
Relative Strength Index RSI confirmed short-term resistance. After a sharp morning rally, the index stood at ES Fibonacci extension 1.618 at around 992.75 and forex indicator RSI have an overbought condition (while being above 70). The market then turned around at 993.

Medvezhe Designing Fibonacci extension 1.618

Bear designing Fibonacci 1.618

Forex Strategy on the RSI and Fibonacci extension 1.618

Example 2

is important to note in this example that the RSI has provided a double meaning overbought above 70 and RSI divergence formed in 20 minutes, thus providing further evidence of harmonious resistance intraday Fibonacci extension 1.618.

conclusion of the transaction on the forex strategy at the RSI and Fibonacci extension 1.618:

Bargain on the forex strategy should be a limit order to set the level of 1.618 on the selected motion or rebound from this level of Fibonacci and the opening of the next hour, just to draw attention to the indicator RSI ( where he is - in the oversold or overbought) and only then open a trading position.

But do not forget those not menie about stop-loss orders and repositioning to zero. It is better to use the same standard trailing stop (the size depends on the chosen currency pair and time period).

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