RSI 2 TimeFrames Indicator For MT4
Table Of Contents:
- RSI 2 TimeFrames Indicator For MT4
- Trading ideas with the RSI 2 TimeFrames Indicator For MT4
- RSI 2 TimeFrames Indicator For MT4 - Best strategies to use the indicator
- RSI 2 TimeFrames Indicator For MT4 - Buy Entries
- RSI 2 TimeFrames Indicator For MT4 - Sell Entries
- RSI 2 TimeFrames Indicator For MT4 - Conclusion
The RSI 2 TimeFrames Indicator For MT4 is tremendous indicator that allows you to know about the overbought and oversold condition based on two time frame data. If the red curve trades above the blue curve, look for selling signals. On the contrary, when the bred curve trades below the blue curve look for the buying signals. If necessary, use other tools while using the readings of this indicator.
The RSI 2 TimeFrames Indicator For MT4 is a modified version of the regular RSI. We all know, multiple time frame analysis is a very powerful way to filter out the best signals in the market. But taking data from different time frame window is slightly hard for the novice traders as they keep fails to keep track of the important market metrics while making the time frame switch. But as a user of the RSI 2 TimeFrames indicator, you can analyze the RSI current data with a 1-hour default RSI value. The one hour RSI signal line is colored in red and when you move to the 4 hours or any time frame, you will notice another RSI signal line colored in blue. The blue colored line shows the RSI value for the selected chart.
Some retail traders often prefer to analyze the 4 hour RSI signal with the daily RSI data. In such a case, you can have to change the default settings in the RSI 2 TimeFrames indicator. Select the 4 hour time frame and the red line will be showing the price movement for the 4-hour time frame. But note that, 1-hour time frame tends to generate the best result when you look for the quality signals by evaluating the RSI value from two different time frames.
Trading ideas with the RSI 2 TimeFrames Indicator For MT4
Knowing about the use of the RSI 2 TimeFrames is not enough. You have to generate trading ideas by deploying a strategic method. Those who are comparatively new to the trading profession can develop their trading strategy by using the demo account. The demo account is considered as blessings for novice traders. They can easily create a perfect trading strategy with zero risks. Trade as long as you want but develop a strategic method that will allow you to analyze the complicated price movement of the currency pairs.
After having a basic trading strategy, you have to test your system. The signals generated by your trading method must have a decent win rate. If you fail to win more than 65% of the time, revise your trading strategy. Once you are certain that the system is capable of making a decent profit, deploy the RSI 2 TimeFrames to improve your success rate. The integration can be done in the development phase of your trading system. And the person who has already perfected a trading system can integrate the RSI 2 TimeFrames to improve the accuracy in each trade.
RSI 2 TimeFrames Indicator For MT4 - Best strategies to use the indicator
Before you learn to take the long and short trade via RSI 2 TimeFrames Indicator, you have to know more about the role of trading strategy. RSI is based on the overbought and oversold algorithm. So, it is better you pick a trading system that focuses on the higher time frame. However, you can also take the trade in the lower time frame by using the price action signal. Learning about the Japanese candlestick pattern is going to be a bit tough task but you have the liberty to take advantage of the demo account.
The novice traders should start using the RSI 2 TimeFrames Indicator with the trend trading strategies. One of the key advantages of using the trend trading technique and RSI at the same time is the significant decrease in false signals. In most cases, the bullish and bearish signal will be formed at the main chart while the blue and red signals in the RSI 2 TimeFrames Indicator are testing the 20 or the 80 levels. Though the 20 and 80 reference line is enough to get the exact reading from the indicator, it better to add an additional line with a value set to 50.
RSI 2 TimeFrames Indicator For MT4 - Buy Entries
People who have basic skills knows the importance of the support level. The rookies often think they can securely execute long trades by evaluating the reading RSI 2 TimeFrames. They become too much biased on the signal curve and start breaking the rules. But the professionals depend on sequential actions to take the long trades. First of all, they evaluate the support levels in the chart and then they look for the buying signals. After the determination of the potential long signal, they move to evaluate the signals from the RSI 2 TimeFrames indicator.
In order to make the reading of the RSI 2 TimeFrames indicator easy, the experts rely on three simple lines. Add 80, 20, and 50 levels to the indicator window. The blue and red signal line must reject the 20 lines and start heading towards the 50 lines. But if you intend to take advantage of the market momentum, you should be seeing a break of the 50 lines in the RSI 2 TimeFrames. This means, the blue, and the red signal lines will sharply penetrate the 50 reference line and head towards the overbought zone or the 80 levels. Once you have evaluated the market state, you can open the long trade.
RSI 2 TimeFrames Indicator For MT4 - Sell Entries
The 80 level for the RSI 2 TimeFrames indicator works as the overbought zone. And the 20 level acts as the oversold levels where the retail traders look for buying signals. Since your priority is to look for the short trade, look for the sell signal when the blue and red signal line is near the 20 levels. In the price chart, you should see that the price is rejecting a major resistance level with strong momentum. And the rejection of the resistance level will create a strong bearish price action signal.
After the identification of the cell signal, you have to move to the RSI 2 TimeFrames Indicator data reading. The sell signals which are formed due to the break of the support level must need a strong bearish momentum. So, the red and blue signal line will not be testing the 80 levels rather it will break below the 50 levels with a sharp move. On the contrary, if you get the ideal short signal at the resistance level, you should see the position of the RSI 2 TimeFrames Indicator signal line right at the 80 levels. Before you take the short trade, evaluate the lot size so that you don’t end up taking more than 2% risk in a certain trade.
RSI 2 TimeFrames Indicator For MT4 - Conclusion
Learning to use the RSI 2 TimeFrames is not a tough task. But if you intend to change the default settings, things will become a bit tricky. As a novice trader, you should not change the reference 1-hour time frame for the first RSI signal line to a lower time frame. If required, you can assign the red signal line to 4 hours or the daily chart. Once you have changed the default settings, make sure you blackest the performance of the indicator. Using the wrong settings in the RSI 2 TimeFrames can lead to a catastrophic disaster.
We recommend the retail traders to master the use of the RSI 2 TimeFrames using the default settings. Start using the signal lines just to filter out the potential trade setups by using the 20, 80, and 50 reference lines. But never think the price will drop or rise just because the RSI signal line is in the overbought or oversold territory. At times, you might see extended movement in the price due to the high impact news release. So, to improve the efficiency of the RSI 2 TimeFrames, learn to evaluate the major news. Merge your technical and fundamental analysis data so that you can make better decisions.