Vantage FX (www.vantagefx.co.uk) look at off-chart indicators and how they can assist with your trading.
Off-Chart Indicators
Today we will be looking at 4 main off-chart indictors; RSI, Stochastics, MACD histogram and Momentum.
The chart on this analysis is the CHF/USD. The RSI becomes oversold and moves downward as price rises, which is classic divergence. The stochastic on the chart shows that the trade should be short, with a margin of room still available. Momentum has also been bearish, supporting price action showing a fall in price. However, the RSI has shown a different view, with the indicator suggesting a long position.
Three of the off chart indicators and the stochastic have all shown short positions, whilst the RSI has shown a different view; none the less, there was certainly enough information from the off chart indicators to show a falling price as suggested by price action.
