Buying and Selling Forex Using RSI: A Guide

A trader raising their hands after a successful trade.

RSI, or the relative strength index is a price momentum indicator that belongs to the same family as stochastic oscillators and MACD. Similar to other indicators, RSI can be projected on a different graph in line with price and can have an oscillator range from0-100.

Traders use the RSI for identifying oversold and overbought market conditions, which helps them determine entry and exit points. However, identifying these conditions using the RSI can be challenging for a new trader. The best forex trading mentors at Trading Mentor can help you realize how the indicator can best benefit your trading decisions.

Let’s discuss some important things about RSI to help you formulate forex buying and selling strategies.

RSI For Identifying Overbought Market Conditions

The RSI provides several overbought and oversold market signals that can be read in the context of the indicators. Traders who use RSI can spot opportunities in overbought conditions. The overbought conditions are instances where forex pairs are greater than 80 RSI.

The price for these pairs can be adjusted artificially based on consumer demand for the trade position. This means if the demand dies, prices will drop. However, traders should consider other factors that can contribute to price movements. These include economic and political turmoil, global developments, and more.

RSI For Identifying Oversold Market Conditions

Similar to overbought conditions, the RSI can also pinpoint oversold conditions, leading to a price correction. In a majority of the cases, the level of RSI indicates the oversold conditions that are marked at 20. Certain traders can also decide to adjust this based on their trading goals and strategies.

However, appropriately adjusting the RSI for oversold conditions requires trade experience, and new traders may find this challenging. Trading Mentor’s best forex mentors will help you determine the best adjustments for oversold market conditions to minimize trade losses.

What’s more, similar to the overbought conditions, the oversold forex pairs are the ones that can see price drops below market values because of the extensive movement. These conditions can also present several openings to traders in discount positions. Traders can make quick profits from the swing trading once RSI and prices return to normal. They can also develop forex strategies that rely on several data points when determining a value for the trade position.

A person checking forex rates on their smartphone.

Learn More About Forex Buying and Selling from The Best Online Trading Mentors!

If you’re looking to make more profitable trade decisions, Trading Mentor offers an online mentoring platform where you can learn and improve. Our forex, crypto, and stock trading courses for beginners are designed to help new traders realize various complexities of the forex market to capitalize on them. Contact us today and get to know our professional mentors.

A Comprehensive Beginners Guide to Forex Trading

A smartphone showing exchange rates.

Forex is a combination of foreign exchange and currency. The process of exchanging forex is changing one currency into another for several reasons, including tourism, commerce, trading, etc. According to the Bank of International Settlements’triennial report from back in 2019, the trading volume for forex reached around $6.6 trillion in April of 2019.

Continue reading

What is Forex Trading, and How Does It Work?

It’s unlikely that you haven’t heard about forex trading. Forex trading has been booming exponentially over the past decade or two. Today, you’re likely to find advertisements for forex trading applications, courses, and similar things all over the internet. But that wasn’t always the case. Governments, banks, and financial institutions have been trading foreign currencies for a long time. However, forex trading wasn’t accessible for non-institutional traders for the longest time. But technological advancements and the internet have changed that. 

The foreign exchange market is the most valuable and liquid financial market worldwide, dwarfing other financial markets like stocks, commodities, metals, etc. According to BIS, forex markets had a daily turnover of over $6.6 trillion in 2019. 

Considering how valuable the forex market is, it’s no surprise that many people gravitate towards forex trading. However, before delving into forex trading, consider learning more about how forex trading works to ensure you don’t incur avoidable losses.

What is Forex Trading?

Forex is a portmanteau of foreign currency and exchange. Forex trading refers to buying, selling, and exchanging one currency for another. People often need foreign currencies for different reasons, including tourism, business, etc. Let’s assume you’re a US citizen vacationing in Greece. You’ll likely need Euros to buy goods and services while touring Greece. Likewise, if you’re dealing with a Chinese corporation, you might need to purchase Chinese Yuan to pay for their goods and services. Hence, exchanging foreign currencies is crucial for most individuals and businesses.

How Does Forex Trading Work?

Forex traders exchange foreign currencies to profit from price fluctuations or interest rate differentials. Typically, forex trading works through currency pairs. Forex traders buy and sell currency pairs to generate returns. So, what are currency pairs?

Currency pairs measure one currency’s value against another. Currencies have exchange rates that determine their terms and position against another currency. For instance, the Euro to US Dollar is currently trading at $1.12. That means if you wanted to purchase the 1 Euro on the forex market, you would need to pay $1.12 for it. 

You’ll be interested to know over 170 currencies exist on the forex market. However, statistics show the seven most popular currency pairs account for approximately 68 percent of forex trading volume. Typically, the most popular currency pairs include the US dollar because of its ubiquity and global acceptance; and the Euro because of its collective strength stemming from the EU and EEA. 

Forex has some distinct features that make it unique compared to other asset classes like stocks, indices, and commodities. Traders can profit from forex trading in two ways, including through exchange rate changes and interest rate differentials. Traders profiting from exchange rate differentials will purchase a currency with a higher exchange rate and short the currency with a lower exchange rate. A notable example of traders benefitting from exchange rate differentials is when they would short the Japanese Yen for the British Pound Sterling before the 2008 financial crisis. Currency exchange rates primarily vary based on the market forces of supply and demand.

Get Started in Forex Trading with Trading Mentor

Trading Mentor is one of the best online mentoring platforms around. The website numerous online trading training courses, making it the best trading platform for beginners.

If you’re looking for the perfect trading mentor to help you with your stock, forex, or crypto trades, consider checking out our website today.

Here’s Why It’s Important to Hire a Trading Mentor

Trading in the forex market is very challenging, especially for new people. If you don’t have the right guidance, tools, and understanding of the market you may not make as much profit for the time investment.

This is why you need help from some of the best forex trading mentors from Trading Mentor. forex trading can be an amazing career option got people who can make successful profits. It also provides for a passive way to earn income from home.

Let’s discuss some important reasons why you need an expert’s help before you start trading.

New Possibilities

The best mentor for stock trading or forex trading will help you find opportunities that you need for trading with the best traders. Mentors have years of experience in the trading industry and can take full advantage of the market.

The online trading training courses at Trading Mentor will also help you understand weekly market shifts and trends. This will allow you to look for the best trading opportunities to capitalize on.

You can also become a part of a larger trading community where you can find people who’ll share engaging ideas about the market. All this information will prove profitable for your trading journey.  

Putting Everything Together

The biggest challenge for a forex trader, in particular, is that you’ll have to think about trading strategies, money management, account management, and several other things. This can make trading appear overwhelming. However, there’s a faster route to successful forex trading—hiring the best forex mentors. A mentor will help you develop a strategic plan that can help you in various ways.

You can track trading progress, determine goals, make adjustments, and more along the way. Mentors also know how the intricate trading systems work and which brokers are the best for your trading conditions.

What’s more, mentors will help you become an effective trader by helping you understand the ins and outs of trading. However, you need to look for a reliable mentor that can help you become an independent and confident trader. Luckily, at Trading Mentor, we have several experienced people ready to teach you.

Shorter Learning Curve

Having someone save your money by helping you define goals and correcting your trading mistakes can be priceless especially if you are new to trading. To learn how to become a successful trader in the market, you need dedication, time, effort, and high-quality education.

Most people don’t get the time to study forex trading or develop techniques of their own. A mentor can significantly reduce the time you need to understand the trading of different currencies. They will also help you realize the mistakes you are making and how they are affecting your trading success.

To trade like the best, you need to learn to trade with the best. Learning anything from an experienced individual such as a trading mentor will give you the head start you need to start a trading career.

If you’re looking for an online mentoring platform, for diverse trading market knowledge, Trading Mentor can help. We offer a vast range of some of the best online trading training courses where you can learn several skills directly from the experts. Alternatively, our platform also welcomes new mentors wanting to share their insights about the different trading markets. Contact us today for more information about our online mentors.

A Brief History of Forex Trading

Forex trading is exchanging fiat currencies based on the prevailing exchange rates. The process of exchanging currencies has been with us for centuries and dates back to the Babylonian era. Nowadays, forex trading is one of the most significant financial markets globally. It’s mostly liquid and accessible to everyone.

This is why traders must realize the history of forex and the historical events that have shaped the market we know today. You can even learn a bit about forex history through our online mentoring platform’s online courses.

Let’s briefly discuss the history of forex trading to help you understand better.

Where It All Began

Forex originated from the barter system, which was the main method of trade back in 6000 BC. The tribes introduced this system in Mesopotamia. Under this system, goods used to be exchanged for other goods.

In the early 6th century BC, gold coins were introduced. These coins were the first currency with divisibility, portability, uniformity, durability, and accessibility. Gold coins were widely adopted as a medium of exchange.

In the early 1800s, the gold standard was adopted where the government was able to redeem paper money in its gold value. This only worked until World War 1. Later in the early 1900s, the gold standard supported the foreign exchange market. The countries started to trade with each other to convert the currency into gold.

Key Events in Forex History

In the 1990s, the currency markets were becoming more complicated and faster than before as the money value changed. With the internet, a person sitting home can find an accurate price for their currency. This previously required several brokers and traders.

Because of the internet, advancements in communication were a great way for countries to globalize and capitalize on their currency markets. New and emerging markets flourished by currency speculations and attracting foreign capital.

The history of forex since 1944 is a classic example of how a free-market works. The competing forces had given birth to a marketplace where liquidity was unparalleled. The spreads also fell dramatically, which further increased the competition. People trading larger amounts could now access the same communication networks that global merchants and banks used.

Forex Now and In the Future

Nowadays, the forex market is one of the largest markets in the world. In 2019, there was more than $6.6 trillion worth of trades on the forex market daily. However, the future of forex is uncertain as several factors keep changing, creating various opportunities for the traders.

Forex traders need to stay ahead of this fluctuating curve to succeed in the ever-changing market. This is why taking online trading training courses is essential for understanding the ins and outs of the market.

Trading Mentor offers professional forex trading mentors who will help you make more profitable decisions by guiding you with their industry experience. We also offer stock trading courses for beginners and advanced stock market investment courses for traders who are looking to hone their trading style even further. Contact us today to choose a mentor that best fulfills your learning requirements.