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How to use technical indicators for Day Trading

If you defined and set your own rules for day trading you become success. In the day trading two factors are very important 1) News and 2) Technical indicators.

In this article we discuss about technical indicators, I show you how to use RSI for day trading.

Relative Strength Index (RSI) is a price depended oscillator and it oscillates between 0 and 100. It’s a very popular momentum indicator. Relative Strength Index (RSI) gives momentum of price movements. RSI name telling it’s a measurement of strength of the trend. It’s work good with 14 time period. You can very time period system find out which time period works best for you.

RSI usually tops above 70 and bottoms below 30 and it makes top or bottom before the stock price tops or bottoms. You can buy stock when there is a positive divergence system sell with negative divergence.

Day Trading Use RSI

A lower peak of the RSI against higher highs in the price (Index), that a negative divergence and typically it's a Sell signal. A higher peak of RSI against lower lows in the price (Index) called positive divergence and typically it's a Buy signal.

For winning trade you need to check positive divergence with hourly data and once you got there positive divergence you can go for smaller time frame like 5,10,15,20 minutes and look for all small positive divergence for entry or you can enter when RSI goes below 20 and cross back above 20 that also working good, just try small time frame and find out which one is working batter. For more detail visit our learning center.

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