How to make money by using RSI Indicator on Olymp Trade?

Olymp Trade is a popular online trading platform that allows users to trade various financial instruments such as stocks, currencies, and commodities. One of the most effective tools for trading on Olymp Trade is the Relative Strength Index (RSI) indicator. The RSI is a momentum oscillator that measures the speed and change of price movements. By using the RSI indicator, traders can identify potential buy and sell signals in the market.

In this article, we will explore how to use the RSI indicator on Olymp Trade to make money.

Step 1:

Understanding the RSI Indicator Before you start using the RSI indicator on Olymp Trade, it’s important to understand how it works. The RSI indicator consists of a line that moves between 0 and 100. The RSI line is calculated by comparing the average gain and loss of a specific period. The RSI value is considered overbought when it is above 70 and oversold when it is below 30. When the RSI line crosses above or below these levels, it indicates a potential reversal in the market.

Step 2:

Setting up the RSI Indicator on Olymp Trade To use the RSI indicator on Olymp Trade, you need to add it to your trading chart. Here’s how you can do it:

1. Log in to your Olymp Trade account
2. Select the asset you want to trade
3. Click on the “Indicators” tab
4. Select the “RSI” indicator
5. Set the period to 14 and the overbought and oversold levels to 70 and 30, respectively.

Step 3:

Identifying Buy and Sell Signals with the RSI Indicator Once you have added the RSI indicator to your trading chart, you can start looking for potential buy and sell signals. Here are some guidelines to follow:

1. Buy signal: When the RSI line crosses below the oversold level (30) and then crosses back above it, it indicates a potential buy signal. This means that the market may have been oversold and is now likely to reverse.
2. Sell signal: When the RSI line crosses above the overbought level (70) and then crosses back below it, it indicates a potential sell signal. This means that the market may have been overbought and is now likely to reverse.

Step 4:

Implementing a Trading Strategy with the RSI Indicator To make money using the RSI indicator on Olymp Trade, you need to implement a trading strategy that takes into account the buy and sell signals generated by the RSI. Here are some guidelines to follow:

1. Use the RSI in conjunction with other technical indicators to confirm buy and sell signals.
2. Set stop-loss orders to limit your losses in case the market moves against your position.
3. Use a trailing stop to lock in profits as the market moves in your favor.
4. Take profit at predefined levels based on your risk tolerance and trading strategy.

Conclusion:

Using the RSI indicator on Olymp Trade can be an effective way to make money trading financial instruments. By following the guidelines outlined in this article, you can identify potential buy and sell signals in the market and implement a trading strategy that maximizes your profits while minimizing your risk. Remember to always practice risk management and never risk more than you can afford to lose.