My favourite forex indicator is the Relative Strength Index (RSI) because it provides a clear picture of market momentum and potential reversal points. RSI measures the speed and change of price movements, typically on a scale from 0 to 100. Readings above 70 usually suggest that a currency pair is overbought, while readings below 30 indicate it may be oversold. This simple setup helps me identify when a market might be due for a correction or continuation.

What I like most about the RSI is its flexibility. It works well across different timeframes, whether I’m analysing daily charts for swing trades or shorter intervals for quick scalps. The indicator’s visual simplicity makes it easy to interpret, even during fast-moving markets.

I often combine RSI with support and resistance levels to confirm potential entries and exits. For example, if RSI shows oversold conditions near a strong support zone, it strengthens my confidence in a buy setup. Likewise, I avoid false signals by watching how the price reacts to these levels before taking action.

Overall, RSI helps me maintain discipline by preventing emotional trades. It reminds me to wait for stronger setups instead of chasing price moves. Its balance of simplicity, accuracy, and adaptability makes it my most trusted tool in forex trading.

My favourite forex indicator is the Relative Strength Index (RSI). I prefer it because it’s simple yet powerful for identifying market momentum and potential reversals. The RSI measures the speed and change of price movements on a scale from 0 to 100, helping traders spot overbought or oversold conditions. When the RSI moves above 70, it often signals that the market is overbought and may pull back. When it drops below 30, it suggests the market is oversold and could rebound. What makes RSI valuable is its versatility—it works well across different timeframes and trading styles. I also like how it confirms trend strength and helps avoid entering trades against market momentum.