You have already reported this answer.
Resolved Question
In determining overbought and oversold periods: 1) what's the difference and 2) what are the best indicators?
over 2 years ago
Best Answer - Chosen by Voters
Conditions are said to be overbought when the price of a currency pair has risen to a certain scale - usually when an oscillator rises to a particular level (Stochastics: 80+, RSI: 70+). This usually indicates that prices are becoming 'expensive' and may be subjected to correction. Conversely, conditions are deemed oversold when the price has fallen to some extent - when an oscillator falls to a certain level and beyond (Stochastics: 20-, RSI: 30-). This suggests that prices are becoming 'cheap'. Prices may soon pick up after such condition.
The most commonly used oscillators that determine overbought and oversold conditions are the Stochastics (settings: 14,3,3) and the Relative Strength Index (RSI) (settings: default).
over 2 years ago
Source(s):
* You must be logged in to add comments. Sign In or Join Askpips.com.
Answers (3)
* You must be logged in to add comments. Sign In or Join Askpips.com.
When overbought, this means that a certain currency have high price. So usually when a currency is overbought the price will start to go down. It’s the same with oversold; this means that the price is too low, so the price will start to go up.
over 2 years ago
* You must be logged in to add comments. Sign In or Join Askpips.com.
1) Stochastics and MACD for trend reversal points - you just have to look for divergences. 2) Oscillators but it would be ideal to use more than 1.
over 2 years ago
* You must be logged in to add comments. Sign In or Join Askpips.com.
ForexEA
I suggest you to download some Forex indicators and calculators for free at http://pipburner.com/free-forex-tra...
4 months ago
Report it