The RSX of Momentum indicator is a trading algorithm based on the calculations of indicators included in the standard Forex set. Its calculations are used to determine the current trend, namely its direction and strength, which in turn is also used to determine the moment of opening a trade. At the same time, it should be taken into account that the indicator is suitable for identifying the presence of the market in the overbought and oversold zone. The indicator is presented in the lower window of the price chart as a solid line that changes its color and direction, as well as its location relative to its signal levels, depending on current market conditions. The current values of the line are used to determine the current trend as well as trade in this period.
The RSX of Momentum indicator is suitable for trading on any timeframe using any currency pair.
The RSX of Momentum indicator has several sections in its non-settings, and each of them affects its overall functioning. The Input parameters section in its settings affects its technical operation, the Colors section is responsible for its general visualization, and to add signal levels to the indicator window, use the Levels section.
-Length - calculation period of the RSX indicator. The default value is 14.
-Momentum - the value of the period of the Momentum indicator. The default value is 14.
-MomentumPrice - type of price to which Momentum indicator calculations are applied. Default value is 0.
The RSX of Momentum indicator is very easy to use due to its visualization. To open a certain trade using the indicator, it should be taken into account the current direction and strength of the market trend. For this, the color, direction and location of its line relative to signal levels are taken into account. If the indicator determines an upward trend, long positions are opened, if the trend is downward, short positions are opened. When the trend changes, in both cases, trades are closed. If the trend is weak, trades should not be opened at all.
Signal for Buy trades:
- The indicator line is colored with the growth value and rises above the level of 70.
Upon receipt of such a condition, a buy trade can be opened on a signal candle due to the presence of an uptrend. When it changes, namely when the opposite conditions are received, that is, when the color and direction of its line changes, the trade should be closed. At this point, it should be considered opening new trades.
Signal for Sell trades:
- The indicator line has a color with a falling value and moves down, falling below level 30.
A sell trade, due to the presence of a downtrend, can be opened upon receipt of such conditions. The current trade should be closed when the color and direction of the indicator line changes. At this moment, a change in the current trend is possible, which in turn will allow considering opening new trades.
The RSX of Momentum indicator is a very easy to use, but very effective trading algorithm, as its calculations are based on time-tested indicators. Before using the indicator on a real deposit, it is recommended to use a demo account.