The Relative Strength Index (RSI) has been a go-to indicator for traders for ages, and it still packs a punch today. However, one of the main drawbacks is that it can be prone to market noise, leading to plenty of false signals.
This enhanced version of the RSI keeps the core concept of measuring momentum but fine-tunes it to ensure that you’re only getting the clearest market movements.
When using this indicator, treat it just like you would a standard RSI. Keep an eye out for divergences, trade based on upward or downward shifts in the indicator, or wait for those crucial oversold or overbought zones.
- Feel free to tweak the Signal Period and Rate of Change Period to fit your trading style.
- Make sure to backtest thoroughly before you jump into live trading.
- Always manage your risk effectively.
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