Basics of the Wilder’s RSI Indicator

By | March 16, 2014

Sunday, March 16th, 2014 by Tim Lanoue

In a booming industry such as binary options it is almost impossible for new traders not to try to make a splash in the industry and strive for financial freedom.  Becoming financially independent is one of our most desirable dreams or desires in our lifetime and trading binary online with binary options may just be the gateway for you to be able to achieve it.  The purpose of today’s article is to bring you guys one step closer to financial freedom by providing you with an article that covers the basics of the Wilder’s RSI indicator and how to properly apply it into a binary options trading strategy.

The Wilder’s RSI indicator is classified as a momentum indicator that compares the summation of an assets magnitude losses and gains.  The main function of the Wilder’s RSI indicator is to determine whether or not the asset you are watching is oversold or overbought.  Being able to dictate the market condition of our targeted asset is essential when determining which type of trade we plan to enter when trading our asset.

Setting up the RSI indicator is relatively simple and requires only the completion of two steps.  However, I have noticed that many people tend to lack the set up part in their binary options trading strategy so I will re-emphasis this, do not skip the set up phase when using this indicator in a binary options trading strategy.  The first step we want to make sure is that the asset we are watching displays a low level of volatility, meaning that the asset reflects characteristics where it is less prone to change directions in a short amount of time due to minor market conditions.  Common assets that display this low level of volatility that we are looking for would be the EUR/USD, USD/CHF and Gold.  The last thing we want to make sure is that the time frame that we are watching our asset is no less than 15 minutes and no longer than 30 minutes, any time frames outside this point affect the accuracy of the trading signals generated.

Now that we have the right set up we can look more towards the strategy portion when using this indicator.  As you can see in the picture below we have six trading entries that were placed.  In order for us to place any put trades we need to make sure that our Wilder’s RSI white line crosses downward through the RSI Wilder’s blue line and it has to be above the level 50.00 as indicated on the side of the oscillator.  However, in order for us to place a call trade we need to make sure our Wilder’s RSI white line crosses upward through the RSI Wilder’s blue line and is below the level 48.00.  If all those terms are met then we can go ahead and place those designated trades however if it is not at the right level then do not place those trades.

Trading binary options can be your gateway to financial freedom allowing you do things that you never thought possible.  All it takes is dedication, luck and experience to thrive in the industry so why not take your chances and change your life in this industry.  Setting up an indicator properly in any binary options strategy is always the most important step so make sure you don’t cut any corners there.  If you have any questions or comments please feel free to leave them below.  As always stay tuned for more articles to come!

10 thoughts on “Basics of the Wilder’s RSI Indicator

  1. Mark

    Are there other RSI indicators besides the Wilders RSI indicator? It would be great to get a review of the many different indicators.Thanks for helping me walk through how to set this up!

  2. Michael Axelsen

    Hi Tim,
    This is exactly the point. You can win 3 trades or more, and it is mostly due to luck.
    The RSI cannot stand alone. If I just follow the rules in the article, I will for sure Loose most of my trades.
    That is why I as a newbee would like to have some more guides from you as a very experienced trader, of how to implement an indicator as for instance the RSI.
    Why does it not Work if I only look at the RSI – and follow the rules in your article?, and what should I do to make it Work in say 70% of my trades. I know that I should incoorporate it into a Trading strategy, but what would this strategy be? How would you trade the RSI? I am quite sure that you look for more than just the RSI.
    That would be very exiting to learn about. So maybe a more detailed article about how to trade the RSI succesfully.

    Thanks Again for a very very very great site 🙂

    Best Regards Michael

  3. Tim Lanoue

    Hey Dolora,

    I am very glad to hear that this article has helped you out, that is what we aim for here! Congrats on your next three winning trades, just make sure your set ups are correct and don’t rush or force any trades! Best of luck!

    Tim Lanoue

  4. Dolora

    Great article,when I read your article Iam so excite to do it at once without analyzing every detail of your article, so the result I lost. But when I go back to your article and do it as you have instructed us when to trade I won in my 3 succeeding trade.
    Thanks for the great information

  5. Tim Lanoue

    Hey Doc and Michael,

    Thank you very much for your thoughts about the website and how we can better improve it for you guys, Michael and I are here to help you guys achieve success in the binary options industry and it is extremely self-rewarding knowing that we have contributed to your success, improvement, and we will continue to be here for you guys.

    Just so you know the Binary Options Survival Guide page is similar to what you are looking for Doc, make sure to check it out if you haven’t already!

    Please feel free to let us know if you have any other suggestions or questions relating to this website or a particular strategy, thank you again.

    Best Regards,

    Tim Lanoue

  6. Michael Axelsen

    I totally agree with Doc.
    I am also new to Binary, and I find it very hard to make the 70-80% in the Money that you mention when speaking about indicators and strategies. There must be something you can teach us, so we are able to see a progress in our demo Trading accounts.
    Best Regards Michael, and thanks for a great site.

  7. Doc

    Nice article. I’ll be reading every thing you got. Your looking for comments so here’s mine.

    I’m no genius and I am brand new at this so a real beginners page would be nice. It should be step by step or a.b.c. etc…

    I know this would take some of your time but in the long run, you would end up with more people using your site.

    Thanks Doc

  8. anyoption

    I was happy to read some new information regarding financial world

  9. Jeffery

    I have always loved the patterns in how the financial world works. Thanks!

  10. Binary options trading basics

    nice article about wilder’s RSI indicator..recommend to all new binary traders.


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