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How can we use Bollinger Bands and RSI (Relative Strength Index) together?
Bollinger Bands
I shared an article about Bollinger Bands, you can check it out.
The logic of Bollinger Bands is simple, there are two bands at the top and bottom where the standard deviation of the price is added and subtracted. In the middle is a moving average.
*A rising price usually moves between the moving average and the upper line of the band.
*A falling price usually moves between the moving average and the lower line of the band.
*When the price touches the upper line of the band, it is expected to decrease to the moving average in the middle.
*When the price touches the lower line of the band, it is expected to rise up to the moving average in the middle.
RSI(Relative Strength Index)
It is the graphed version of the acceleration of the price movement.
*Above 70 means overbought.
*Below 30 means oversold.
*A value cut below 50 is a sell signal.
*50 value cut upwards is a buy signal.
If you are using the RSI in conjunction with a moving average.
*Closing the moving average downwards is a sell signal.
*It is a buy signal when the moving average crosses upwards.
Now if we examine the EUR/USD chart;
In general, candlesticks and train lines are more important to me.
After the price came to the train resistance, a pinbar candle was formed; The next day created a red falling candle.
The price made the candle formation when it touched the upper line of the Bollinger Band.
The RSI has crossed the 50 level downwards and sagged below the moving average.
Besides, there is discord in the RSI. Price is below the previous high while the RSI is above the previous high.
***In order for the formations in the indicators and indicators to work, the price trend must return. Otherwise, all signals may be traps.
How can we use Bollinger Bands and RSI (Relative Strength Index) together?
Bollinger Bands
I shared an article about Bollinger Bands, you can check it out.
The logic of Bollinger Bands is simple, there are two bands at the top and bottom where the standard deviation of the price is added and subtracted. In the middle is a moving average.
*A rising price usually moves between the moving average and the upper line of the band.
*A falling price usually moves between the moving average and the lower line of the band.
*When the price touches the upper line of the band, it is expected to decrease to the moving average in the middle.
*When the price touches the lower line of the band, it is expected to rise up to the moving average in the middle.
RSI(Relative Strength Index)
It is the graphed version of the acceleration of the price movement.
*Above 70 means overbought.
*Below 30 means oversold.
*A value cut below 50 is a sell signal.
*50 value cut upwards is a buy signal.
If you are using the RSI in conjunction with a moving average.
*Closing the moving average downwards is a sell signal.
*It is a buy signal when the moving average crosses upwards.
Now if we examine the EUR/USD chart;
In general, candlesticks and train lines are more important to me.
After the price came to the train resistance, a pinbar candle was formed; The next day created a red falling candle.
The price made the candle formation when it touched the upper line of the Bollinger Band.
The RSI has crossed the 50 level downwards and sagged below the moving average.
Besides, there is discord in the RSI. Price is below the previous high while the RSI is above the previous high.
***In order for the formations in the indicators and indicators to work, the price trend must return. Otherwise, all signals may be traps.