RSI Silver Trading Strategies

• RSI Overbought and Oversold Levels
• Relative Strength Index Divergence Setups
• RSI Classic Bullish and Bearish Divergence
• RSI Hidden Bullish and Bearish Divergence
• Swing Failure Strategy
• RSI XAGUSD Chart Patterns Silver Trend Lines
• RSI Summary

Relative Strength Index Indicator Strategy

Relative Strength Index or RSI is one of the most popular silver indicator used in silver trading. It is an oscillator silver indicator which oscillates between 0 -100. This a silver trend following silver indicator. It indicates the strength of the silver trend, values above 50 indicate a bullish silver trend while values below 50 indicate bearish Silver trend.

RSI XAGUSD Indicator Measures Momentum of a XAGUSD Trend.

The center-line for the RSI is 50 silver indicator, crossover of the center-line indicate shifts from bullish to bearish silver trend and vice versa.

Above 50, the buyers have greater momentum than the sellers and xagusd price on the silver chart will keep going up as long as this RSI indicator stays above 50.

Below 50, the sellers have greater momentum than the buyers and xagusd price on the silver chart will keep going downwards as long as RSI indicator stays below 50.

RSI XAGUSD Indicator - How to Trade Silver with RSI Technical Indicator

In the xagusd trading example above, when the silver indicator is below 50, the xagusd price kept moving in a downward xagusd trend. The xagusd price continues to move down as long as RSI indicator was below 50. When the RSI indicator moved above 50 it showed that the momentum had changed from sell to buy and that the downward silver trend had ended.

When the RSI indicator moved to above 50 the xagusd price started to move upwards and the silver trend changed from bearish to bullish. The silver chart xagusd price continued to move upwards and the RSI indicator remained above 50 afterwards.

From the xagusd trading example above, when the silver trend was bullish sometimes the RSI would turn downwards but it would not go below 50, this shows that these temporary moves are just retracements because during all these time the xagusd price silver trend was generally upwards. As long as RSI indicator does not move to below 50 the current silver trend remains intact. This is the reason the 50 center line mark is used to demarcate the signal between bullish and bearish silver signals.

The RSI technical indicator uses 14 day period as the default period, this is the period recommended by J Welles Wilders when he introduced it. Other commonly used periods used by Silver traders are the 9 and 25 day moving average.

RSI technical indicator period used depends on the xagusd chart time frame you are using to trade, if you are using daily silver chart time frame the 14 period will represent 14 days, while if you use 1H silver chart time frame the 14 period will represent 14 hours. For our xagusd example we shall use 14 day moving average, but for your trading you can substitute the day period with the chart time frame you are silver trading with.

To Calculate RSI Silver Indicator:

• The number of days that a silver market is up is compared to the number of days that the xagusd trading market is down in a given time period.
• The numerator in the basic formula is an average of all the silver trading sessions that finished with an upward xagusd price change.
• The denominator is an average of all the down silver trading sessions closes for that period.
• The average for the down days are calculated as absolute numbers.
• The Initial RSI is then turned into an oscillator.

Sometimes very large up or down movement in xagusd price in a single silver trading session xagusd price period may skew the calculation of the RSI average and produce a false silver signal - whipsaw signal - in the form of a spike.

RSI Center-line: The center-line for this silver indicator is 50. A value above 50 implies that the xagusd trading market silver trend is in a bullish phase as average gains are greater than average losses. Values below 50 indicate a bearish phase in the xagusd trading market xagusd prices are generally closing lower than where they opened.

Overbought and Oversold Levels: Wilder set the RSI overbought and oversold levels at which the xagusd trading market moves are overextended at 70 and 30.