Free Forex Indicators (MT4), Trend Following Indicators

RSI Filter Indicator

The RSI Filter Indicator is a trend-following forex/stock scalping and intraday trading companion for MT4 users. It represents an unorthodox way of using the Relative Strength Index (RSI) for identifying accurate trend directions.

RSI is commonly used to identify the market’s overbought/oversold condition. In contrast, the RSI Filter straightly delivers trend signals and examines the signal validity itself.

RSI Filter Indicator Overview

The RSI Filter Indicator plots a signal line alongside the curvilinear line showing the Relative Strength value. It determines the trend signals based on how the indicator level interacts with the filter line.

RSI Filter indicator overview

RSI Filter Indicator Explanation

The RSI value exceeding the signal filter line indicates a bullish market trend. In such conditions, If you notice the price swings higher, remaining under an overall uptrend, it is time to enter long.

In contrast, RSI dropping below the signal filter level hints at a bearish market trend. Once you receive a downtrend confirmation, look for a price pullback to enter short.

RSI Filter indicator explanation

Before you consider a buy or sell exit, it is ideal to wait for an opposite trend signal to your entry. For instance, the RSI moves below the signal line while you’re on long means it’s time for a buy-exit.

Technically, the RSI Filter indicator works on MTF charts. So may look up intraday opportunities simultaneously while scalping in live markets. Moreover, you can apply the RSI trend signal for both forex and stock trading.

RSI Filter Indicator: Buy Conditions

RSI Filter indicator buy signal
  • RSI level is on a rising trend
  • The RSI value exceeds the signal line
  • SL below the recent swing low of the price
  • Exit long when the RSI level drops below the signal line

RSI Filter Indicator: Sell Conditions

RSI Filter indicator sell signal
  • RSI level starts moving within a downtrend
  • The RSI value drops below the signal line
  • Place SL above the current market’s swing high
  • Exit sell once the RSI exceeds the signal line

I have been actively trading the financial markets since April 2012. Besides trading with my personal money I am a technical analyst in a mutual fund that has Rs. 1 billion in assets under management. At my leisure, I love attending live music, traveling, and partying with friends.

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Trend Following System's goal is to share as many Forex trading systems, strategies as possible to the retail traders so that you can make real money.

Risk Warning: Trading in the forex market is very risky. Thus, it is may not be for everyone. A highly leveraged position can work against the trader when the trade does not work as expected. Trading in the forex market can cause to lose a significant portion of the capital or all of the capital. It is crucial to learn about the trading and gain enough experience in the demo account before trading with real money. The trading strategies published on this website do not guarantee profit as the market is dynamic and unpredictable. The past performance of a strategy is not the indicative of future performance. Trend Following System will not accept any kind of liability or damage caused by trading the strategies published on this website.
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