USD/ZAR trading idea using RSI and moving average

USD/ZAR trading idea using RSI and moving average

By quintomudigo | Teacher forex school | 21 Jun 2019


RSI is an oscillator indicator while moving average is a trend indicator.

Today, the USD/ZAR market has been in a bearish trend most of the time.USD/ZAR market has managed to fall below 14.3200. The question is will this bearish trend continue or will the market reverse and become a bullish trend.This is indicated from the candlesticks chart below;   OANDA-Web-Trading-Platform (1).png   From the candlesticks chart above, there is point A which is located along the RSI and point B located along the moving average. Although the market has been in a bearish trend most of the time and we don't know whether the market will continue to be in this bearish condition or it will reverse and become a bullish trend, we can use the concept of RSI and moving average to predict the direction of the market for the remaining time.Using the concept of RSI, the market is normally considered to be overbought if the RSI rises above 70 and oversold if the RSI falls below 30. At point A, the RSI has fallen below 30 thus an indication of an oversold market condition.Although the market has been bearish today and managed to fall below 14.3200, we can decide to follow the concept of RSI and open a buy position because at below 30, that is an indication of an oversold market condition thus the market will reverse and start an upward trend. Using the concept of moving average ,the market is considered to experience a reversal trend if the price rises above the highest high of a moving average or falls below the lowest low of a moving average.At point B, the price has fallen below the lowest low of a moving average thus an upward reversal trend has started to take place. Although today the market has been in a bearish trend and managed to fall below14.3200, We can decide to follow the concept of moving average because the price has fallen below the lowest low of a moving average and open a buy position. Here is how our trading idea for USD/ZAR buy market looks like today;   BUY 14.3200            T/P 14.3600    S/L  14.2800   Make sure to apply risk management while opening your position because this is not an investment advice but just a trading idea


quintomudigo
quintomudigo

Trader, Blockchain Technologist and Contentpreneur. Also founder and CEO @ Teacher Forex School.


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