The RSI indicator is one of the best tools to find the overbought and oversold condition of any currency pair. Starting with the novice traders and ending with the pro traders in Singapore, everyone loves to trade the market based on this indicator reading. But if you use the default settings of the indicators, the chances are very high that you will not make any profit from this market. To become successful at trading, you must learn the proper use of indicators and execute the trade with logics. The new traders often make things complex by using too many indicators. They try to filter out the best trades based on the indicator reading. Let’s learn the perfect way to make money using the tweak value of the RSI indicator.
Using the default settings
Some of you might think the default setting of the RSI indicator doesn’t work. But in reality, you can easily make a profit without even changing the value of the RSI indicator. The moment you start to use the default settings of the indicator, you must focus on the major currency pairs. Trading the cross pair with default settings is very risky since the indicators fail to predict the extreme price movement. You might feel confused about the terms but if you use the demo account, it won’t take much time to learn more about the RSI indicator.
Trading the cross pair
The moment you start to trade the cross pair is the very moment you need to focus on changing the settings of the indicators. Set the period of the RSI indicator to 5 since it will give more accurate signals. Make sure you use a premium trading platform since a few second delays can greatly change the readings of the RSI indicator. The pro traders prefer CFD trading at Saxo since they can easily make by using the robust trading platform SaxoTraderGo. Being an exotic pair trader, you need to focus on the higher time frame. If you intend to trade the lower time frame, it’s obvious you will lose a big portion of the investment.
Learn from your trading mistakes
Making mistakes at the initial stage is very common. As a fulltime trader, you have to understand the fact, trading is all about managing the risk exposure most effectively. Instead of using the real money, open a demo account with Saxo and test a different trading system. Focus on long term goals and see how it works in the long run. If you lose a trade, analyze the market variables and try to find the faults. Try to fine-tune your trading strategy regularly because it will help you protect your investment.
Dealing with the high impact news
Tweaking the value of the RSI indicator greatly change the readings. You might be able to execute quality trades during the major news release based on the default settings of the RSI indicator but things will not work when it comes to altered settings. You have to rely on the technical data to find the very best trades. Analyze the major news release and wait patiently until the market stabilizes. Stop being an aggressive trader since it will always force you to make mistakes. Gain control over your emotions and within a short period, you will know the perfect way to make money online. If you ever get confused by the new settings of the RSI indicator, take a short break and switch to the demo account.
Becoming a profitable trader by using the modified settings of the RSI indicator is easy. You have to rely on proper logic and trade the market in the higher time frame. Make sure you are never trading the market with negative risk-reward ratio. Be smart and take proper precautions to become better at trading.