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RSI simple forex trading strategy - Forex Function

RSI simple forex trading strategy

Last Update: 01 February,2015
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RSI indicator is very popular trading tools and this strategy is based on this indicator. This is a basic RSI trading strategy. This strategy can be used in short time for scalping purpose. New traders can follow this simple forex strategy. This strategy is easy to follow. You can get reverse signals of the market movement from this strategy. So you can easily gain a lot of pips from it. Success rate is also high of this simple RSI trading system.

Required indicator:
RSI indicator.

How to get buy signal
In this strategy you have to find buy signal when RSI indicator stays at oversold area. Below 30 level, it is considered as oversold area. When this indicator crosses 30 level from lower to upper, then you will get reversal signal of the market price. Then you can wait for a bullish candle for confirmation of buy signal. You can buy more when RSI crosses 50 level.

How to get Sell signal
In this strategy you need to find sell signal when RSI indicator moves at overbought area. Above 70 level, it is considered as overbought area. When this indicator crosses 70 level from upper to lower, then you will get reversal signal of market movement. Then you need to wait for a bearish candle for confirmation of sell signal. You can again take sell entry when it crosses 50 level.


Time frame: You can use on shorter time frame. But H1, H4, Daily are recommended.

Currency pairs: Any pairs.

Take profit and Stop loss: For scalping trading purpose, you can set small take profit. If you trade on H1 or H4, you can set take profit 60-70 pips.
You have to set stop below the swing low for buy entry and above the swing high for the sell entry. For higher time frame stop loss should be 30-40 pips and for scalping you can set small stop loss.

Risk warning: In this strategy, only one indicator has been used. So you need to wait for candle confirmation for safety trading. You should not trade on ranging market with this strategy. To get maximum output from this strategy, you need to follow trading rules of this strategy. You have to trade on this strategy with your own risk. You need to follow money management theory. From this strategy, you should not take more than 1-2% risk for every trade. So practice this strategy on demo account and then follow on real account.

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