How to Add RSI Indicator on MT4 Charts - Adding MT4 RSI Chart Indicator
Step 1: Open Navigator Window on Platform
Open Navigator panel as shown & displayed below: Go to 'View' menu (click on it), then choose 'Navigator' panel (click), or From Standard Tool-Bar click 'Navigator' button or press keyboard short cut keys 'Ctrl+N'
On Navigator window, choose 'Indicators', (Double Click)
How Do You Add RSI Indicator on MT4 - MT4 RSI Indicator
Step 2: Expand the Indicators Menu on the Navigator - Adding RSI MT4 Chart Indicator
Expand the menu by clicking the expand button marker (+) or double click the 'indicators' menu, after this the button will appear as (-) and will now display a list as shown below - select the RSI chart indicator from this list of indicators so as to add the RSI indicator on the forex chart.
How Do You Add RSI Indicator - From the Above window you can then place RSI indicator that you want on the chart
How to Add Custom RSI Indicator to MetaTrader 4
If the indicator you want to add is a custom indicator - for example if the RSI indicator you want to add is a custom indicator you will need to first add this custom RSI indicator on the MT4 platform & then compile custom RSI indicator so that the newly added RSI custom indicator pops up on the list of custom indicators in MT4 platform.
To learn how to setup RSI indicators in MT4, how to add RSI indicator window to MT4 and how to add RSI custom indicator in MT4 - How to add a custom RSI indicator in MT4.
About RSI Indicator Explained
Relative Strength Index RSI Technical Analysis & RSI Signals
Developed by J. Welles Wilder, explained in the book "New Concepts in Technical Systems".
Relative Strength Index is the most popular indicator & it's a momentum oscillator and a trend following indicator. RSI compares a trading currency magnitude of the recent price gains against its magnitude of recent losses price losses & plots this data on a scale of values which ranges between 0-100.
Relative Strength Index measures the momentum of a currency pair; values above 50 signify bullish momentum while values below 50 center-line signify bearish momentum.
- RSI is plotted as a green line
- Horizontal dashed lines are plotted to identifying overbought & oversold levels are i.e. 70/30 levels respectively.
FX Technical Analysis and How to Generate Signals
There are several methods used to trade, these are:
50-level Cross over Signals
- Buy signal - when the indicator crosses above 50 a buy/bullish trade signal is given.
- Sell Signal - when the indicator crosses below 50 a sell/bearish signal is given.
RSI Chart Setups
Traders can draw trend lines & map out patterns on the RSI. The RSI often forms chart patterns such as head and shoulders pattern which might not have formed clearly on the price chart.
FX Support/Resistance Breakouts
RSI is a leading indicator & can be used to predict Support/Resistance Breakouts before price breaks its support/resistance level. RSI uses the swing failure signal to predict when the price is about to break support and resistance areas.
Swing Failure - Support & Resistance Break out
Overbought/Oversold Conditions on Indicator
- Overbought- levels above 80
- Oversold- levels below 20
These levels can be used to generate FX signals such as when RSI turns up from below 20 after oversold, buy & sell when RSI crosses to below 80 after overbought, sell. These signals aren't suitable for trading FX because they're prone to a lot of fake outs.
Divergence Forex Trade Setups
Divergence trading is one of analysis method used to trade reversals of the price trends. There are 4 types of divergences that can be traded with this technical indicator covered in the divergence tutorial on this website.
