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The RSI or Relative Strength Index is the most popular technical indicator created by Welles Wilder. His name is not too fortunate for that can induce to the error, as this relative strength is measured not referred to any other value or index, but that is an internal own measurement.

Time Frame: To scalping and long term Currency Pairs: All Indicators: William's Percent Range - %R (200) OsMA (20,40,10), 50 EMA (EMA = Exponential Moving Average)

As mentioned in the previous article, the EMA acts as support or resistance levels dynamic where the price tends to bounce, ideal to place our stop loss, or our trailing stop.

Time Frame: Medium and Long-term Currency Pairs: High volatility (EUR / JPY, GBP / JPY, ect.) Indicators: MFI (23) and SMA (50) (SMA of 50 periods within the IMF)

They are a set of indicators developed by Welles Wilder that are plotted with three lines ADX, DI+ and DI-. The ADX is calculated from the Directional Movement Index. The Directional Movement Index (DMI) is decomposed into DI+ (Positive Directional Index) and DI- (Negative Directional Index) and is a measure of the amount of movement upward or downward that have the prices.

As mentioned in the description of the strategy, identify support and resistance levels are critical to the development of our trading with this strategy, can be placed in these, our orders stop loss or take profit. We define the concept of support as a price level that is below the current one, in which we expect the buying power exceeds the sales force, so that bearish movement will be slowed and therefore, the price rebound this level upwards. Typically, a support corresponds to a floor reached earlier.

This strategy works with the strength of a trend, ie when the currency pair or any other financial instrument into a strong trend, either upward or downward. If the couple enters a sideways trend this strategy does not give any input signal or will give deliver a false signal, but for this we have to ADX.