A feature of Forex is that this market, as you know, does not have a specific territorial location. In addition, Forex does not have any centralized management bodies.
This specificity determines the significant differences between the Forex currency market and other markets for financial assets that have more pronounced features of institutional structures (for example, financial exchanges that have a specific physical location and regular governing bodies).
Forex is a currency conversion system that functions as an electronic network of various entities interested in exchanging currency regularly.
A competent analysis of the market is of great importance for understanding the situation on Forex and making correct trading decisions. It is known to be made by speculative Internet traders in two main areas:
• fundamental approach to analysis (the study of purely economic factors);
• technical approach to analysis - observation of a currency rate and study of its dynamics through statistical methods.
Characteristics of the relative strength index (RSI) analysis method on Forex
The method of RSI analysis can be considered a useful tool for studying the situation on Forex.
The method of the relative strength index analysis of power in Forex trading is the formation of a technical report that allows traders, investors and brokers who regularly work at Forex to make trading and investment decisions that have a clear rationale for the real market realities.
Forex market is characterized by a very high level of liquidity and significant trade turnover. The situation on Forex changes very often under the influence of various circumstances and various factors.
Analysis of the relative strength index in Forex takes into account all these factors and circumstances, and also takes into account the trends in this market that were relevant to him in some past.
The relative strength index analysis compares the exchange rates for different currency pairs every day, identifying the strength indicators that are sorted and ranked according to the rating that was formed for the previous week.
Thus, the analyst will be able to fairly easily identify a certain tendency on Forex (for example, steady growth), since the generated report is based on data accumulated over the previous 45 weeks.