Two Period RSI Indicator
MT4A Two Period RSI indicator that uses short and long periods. It is an excellent tool for trend confirmation and a great trend reversal detector.
Description
As the name implies, the indicator comprises two relative strength index (RSI) lines. To be precise, one is a short period RSI, and the other is a long period RSI. Like the conventional indicator, the two-period RSI indicator gives a buy and sell signal when it crosses the overbought and oversold levels. However, it goes further to provide a signal confirmation by using line crossovers. You can use the indicator to trade any currency pair and time frame.
How To Use the Two Period RSI Indicator
Buy Signal
Wait for the indicator to cross into the oversold area. It gives a buy signal when the short period RSI enters the oversold region. Wait for the indicator to break out of the oversold area. The trade confirmation occurs when the short period RSI crosses the long period RSI from below.
Sell Signal
The indicator gives a sell signal when the short period RSI enters the overbought regions. You should get ready when the indicator leaves the region and starts falling. The signal confirmation is when the short period crosses the long period RSI from above.
Two Period RSI Trading Example
The picture shows the price of Great Britain against the US dollar. The first moving RSI enters an overbought area, which signals an impending downtrend. The first moving area crosses the slow-moving RSI, a confirmation signal.
Conclusion
The two-period RSI is an indicator that combines two RSI using two different periods. You only need to wait for a crossover between the long RSI to enter a buy and sell signal.
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