RSI is an index of relative strength. It measures momentum and price on a chart. Impulse is the key to trade. If there is no momentum, there is no trade. The pulse on the RSI generates 4 types of signals. They can be considered as “signs” or “hints”. Each signal tells a story, and the signals together can tell a story.
Traders who understand these signals know when the market is recovering or continuing an existing trend. Knowing these things while viewing a trading chart makes reading and understanding it much easier, as well as knowing how and where to act depending on the information in front of you.
If you are trading 4 major pairs and trading an hourly chart, you will need to manually check every hour to see if one of the 4 signals has occurred. It takes a few minutes instantly. However, there is an RSI that actually checks you out. It is called the RSI Paint Indicator.
The RSI paint indicator “draws” a new line each time a new price is formed; positive divergence, negative divergence, positive reversal, or negative denouement. These signals help the trader to read on the trading chart two types of momentum. Understanding this momentum, traders can make smart decisions about when to exit and when to exit the market.
The RSI Paint Indicator allows the trader to do other things as well, while the RSI Paint Indicator monitors the price on as many currency pairs as required and at any time. When a new signal appears, the trader sees on the screen a small box with a currency pair, time and type of signal. The alert is sent to your computer and then either to your email or to your mobile phone if you are not in front of the computer.
The RSI Paint indicator is a stand-alone trading indicator that warns the trader when it is necessary to trade, in particular, RSI reversals, as these are little-known very powerful trading signals on the RSI. If you add the RSI Paint indicator to your graphics package, you will begin to understand the importance of momentum in trading any financial instrument. The RSI Paint indicator works on a very popular Forex trading platform – Metatrader, which can be found in many brokers.