The Relative Strength Index (RSI) is an important momentum indicator that helps traders evaluate situations where a stock or forex pair is overbought or oversold.

How to Use RSI Indicator as a Signal Source?

Any time low RSI levels are recorded, below 30, 25, and 15, it shows an' Oversold' condition. It helps the trader in generating a potential buy/put/purchase signal. On the other hand, if it is over 75, 85, 95, or 100 levels, it indicates that the pair is overbought hence generating a sell signal.

How to customize the RSI indicator to show overbought and oversold on MT4

Step One: Click the indicators icon on your MT4 platform.

Step Two: On the Indicator Window 1, type the (+) icon.

Step Three: Scroll down to the Oscillators and click 'Relative Strength Index'

Step Four: Click the levels tab at the bottom of the page.

Step Five: Click the (+) icon and type 15, 30, 85, 95, and 100.

Step Six: In the description area write the following:

15 –Oversold

30-Sold

85-Bought

95- Overbought

100-Extremely Bought.

Please watch the below video for a better and more practical showcase on customizing and setting up the Relative Strength Index.

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