---
title: 'Best RSI Indicator Strategy for Day Trading Forex (RSI Indicator Explained)'
source: 'https://youtube.com/watch?v=MW3oHn7qJ_U'
video_id: 'MW3oHn7qJ_U'
date: 2026-08-05
duration_sec: 532
---

# Best RSI Indicator Strategy for Day Trading Forex (RSI Indicator Explained)

> Source: [Best RSI Indicator Strategy for Day Trading Forex (RSI Indicator Explained)](https://youtube.com/watch?v=MW3oHn7qJ_U)

## Summary

The video explains how to effectively use the Relative Strength Index (RSI) indicator for trading, debunking common misconceptions and presenting three practical strategies that combine RSI with support/resistance, trend lines, and the 50-point line.

### Key Points

- **Introduction to RSI** [00:03] — The RSI indicator displays a single line with two reference points at 70 (overbought) and 30 (oversold). A common misconception is that overbought/oversold automatically leads to reversal, which is false and can lead to losses.
- **Flaw of Overbought/Oversold** [01:54] — In strong trends, RSI can stay overbought/oversold for long periods, causing false signals. Example shows price continuing upward despite RSI being overbought.
- **RSI as Confirmation** [02:33] — Use RSI as a supporting indicator, not the main one. Combine with support/resistance and trend lines for more accurate signals. Tip: price should reject a level at least three times to confirm strength.
- **Strategy 1: RSI with Support/Resistance** [03:42] — When RSI is oversold at a major support line, it's a strong buy signal. Example shows price reversing up each time it hits support with RSI oversold.
- **Strategy 2: Divergences** [04:26] — Divergence occurs when price and RSI move in opposite directions. Bullish divergence: price makes lower lows but RSI makes higher lows. Bearish divergence: price makes higher highs but RSI makes lower highs. Use the CRS indicator on TradingView to spot divergences easily.
- **Divergence with Trendlines** [06:09] — Combine divergence with trendline breaks for confirmation. Example: Shopify shows bullish divergence followed by a green candle breaking trendline, a buy opportunity. Bearish example shows price breaking trendline with a huge bearish candle.
- **Strategy 3: 50-Point Line** [07:18] — Change RSI settings to use only the 50 line. If RSI crosses above 50, it's bullish; below 50, bearish. Combine with stochastics for confirmation: buy when RSI crosses above 50 and stochastics is oversold; sell when RSI crosses below 50 and stochastics is overbought.

### Conclusion

The RSI indicator is most effective when used as a confirmation tool alongside other technical analysis methods like support/resistance, trend lines, and divergences. Avoid relying solely on overbought/oversold signals, and always seek additional confirmation to improve accuracy.

## Transcript

i'm revealing the best way to use the rsi indicator important that we can identify key levels on the market where prices
are more likely to switch directions these key levels can be detected if we high or low price and the rsi does a very good job of doing that and in this video i'm revealing the best
strategies that we can use with the rsi indicator before we if you have any suggestions for future videos or just questions about trading in general feel free to leave them in the comments below
i'm still a small channel so i'll still have time to read and reply to all of so without further ado let's get on with the video so if you open the rsi indicator it displays a single line
displays a single line and two points the 70 and the 30 point and two points the 70 and the 30 point if the rsi is above the 70 point meaning is considered overbought and if the rsi is below the 30 point
meaning the market is considered oversold so a common misconception that so many traders make oversold the market will automatically reverse
upwards and when the rsi hits overbought the market will automatically reverse downwards using the rsi indicator if you want to burn your money away
because it simply does not work you see the flaw of the rsi indicator is overbought and oversold strategy with all market conditions if the market is on a strong trend the rsi will display so many false
signals here's an example you can see that the price is clearly on an uptrend and the rsi indicator is at the overbought levels so if you took a cell position here
hoping for a reversal let's see what happens the price instead pushes further to the upside and the rsi went to overbought levels so just because the price is overbought
doesn't mean it's going to reverse down to oversold prices can stay at overbought and oversold levels for long periods of time so instead of making the rsi as your main indicator
supporting indicator you want the rsi to further confirm your analysis and my favorite type of analysis when combining with the rsi indicator is just simple support resistance and
trend lines for example an rsi that signals oversold levels alone can lead to false signals but if the rsi is at the oversold levels while being in a major support line it's a much more accurate signal
a much more accurate signal so let's jump into a chart here you can see that the price is clearly on a downwards movement you can draw a trend line here as price is rejected multiple times
below here a little tip when drawing support resistance line that i personally use is that prices needs to reject at least three times to further confirm that it's a strong support or resistance
so now the price is back at the lower trend line after it rejected multiple times and we can also see a strong price rejection while the rsi is at the oversold levels
opportunity so here's another example in this chart you can see a clear support line now as the price hits the support line and the rsi is at the oversold level the price reverses
back up every time we can actually see this happening two times already the price hits and reverse hits and reverse now we can see the pattern starts forming again the price is at the support line
and the rsi is at oversold signaling that the price will likely reverse to so this is also a good buying opportunity here [Music] another way to utilize the rsi indicator
another way to utilize the rsi indicator is with divergences a divergence is when the price of an asset is moving in the opposite direction of the rsi for example normally when the price of a
stock is forming higher highs the rsi will also form higher highs and if it's forming lower lows the rsi will also form lower lows forming higher highs but the rsi forms lower lows instead so
this is called a divergence and i understand that finding a divergence with a naked eye is very hard that is why i use an indicator on training view called crs so this indicator will help you a lot
happens this will make your job 10 times easier there are two types of divergences a bullish and a bearish divergence so a bullish divergence
but the rsi is forming higher highs instead this signals that the price is going to reverse to the bullish side opposite when the price is forming higher highs
does not agree with the direction of the price and instead forms lower lows this signals that the price is going to reverse to the bearish side so just like when using the rsi
you cannot just buy or sell if a divergence happened case i'm also using support resistance and trend lines for my second confirmation so let's jump
into a chart as we can see shopify was heading on a while the price rejects this key level of resistance multiple times so we can put a trendline here
divergence followed by a big green candle that broke out of the trend line so this will be a good buy opportunity
so let's look at another example you can see that the price is on a clear here as it rejects multiple support levels you see a bearish divergence forming as rsi
is displaying lower lows yet prices are heading towards higher highs next you can see that the price broke out of the trend line out of the trend line and a huge bearish candle was formed
and a huge bearish candle was formed so this is a good sell opportunity another way of utilizing the rsi is by using the 50 point line 70 and 30. so you actually want to change
this into 50 and just disable the other ones so now we have a middle line in the rsi so in this strategy we are actually using the rsi for a trend indicator instead of a reversal indicator
how this works is that if the rsi crosses above the 50 point line it means that it's a bullish signal [Music] and if the rsi crosses below the 50 point line
it means that it's a bearish signal but again we would also need a second confirmation indicator to further support our analysis in this i'm combining it with the stochastics indicator
indicator so let's jump into the examples here the 50 point line while the stochastics is at the oversold levels so this is a good opportunity to buy
so let's look at a few more examples here the rsi crosses below the 50 point line and the stochastics and the stochastics is at the overbought levels so this is a
good opportunity to sell as the price reverses strategies that you can use with the rsi indicator that you can implement right now and i would like to ask a very small
to the channel it literally takes only two clicks but it means a lot to me so thank you guys for watching and i'll so thank you guys for watching and i'll see you in the next video