What is the RSI Indicator?
Developed in 1978 by J. Welles Wilder Jr., RSI now become one of most technic that used by millions peoples. Also, its has measures the speed and magnitude of price changes to identify overbought or oversold conditions in a market.
The RSI value oscillates between 0 and 100:
- Above 70 → Overbought market (potential downward reversal)
- Below 30 → Oversold market (potential upward reversal)
- Around 50 → Neutral momentum
For binary options traders, RSI serves as a quick visual cue to anticipate short-term price reversals, making it a powerful tool on platforms like Quotex.
Why RSI Works Well for Binary Options Trading
Binary options trading is time-sensitive, often requiring decisions within minutes. RSI’s can be detecting a momentum shifts and allowing traders to:
- Spot quick reversals before they happen.
- Identify exhaustion points in a price trend.
- Suitable for many assets likes forex, commodities, and many more.
- Simplify decision-making with clear numerical thresholds.
On Quotex, where traders can choose expiry times as short as 60 seconds, RSI’s clarity becomes a competitive advantage.
Setting Up RSI on the Quotex Platform
To trade RSI effectively, you first need to configure it properly:
- Login to Quotex – Open your trading account at quotex-vip.com.
- Choose Assets to Trade – You need to know about currency pair, commodity, stock, or crypto that you want to trade.
- Add the RSI Indicator – Click on “Indicators” and select Relative Strength Index.
- Time Period – The default time period is 14, but you can also adjust based on your strategy.
- Customize Levels – Keep 30 and 70 as standard overbought/oversold levels.
Step-by-Step RSI Trading Strategy
Step 1 – Identify Overbought and Oversold Zones
- RSI > 70 → Market may reverse downwards.
- RSI < 30 → Market may reverse upwards.
Step 2 – Confirm with Price Action
Look for candlestick patterns such as hammer, engulfing, or pin bar to confirm RSI signals.
Step 3 – Place Your Trade on Quotex
Once confirmed, place a Call (UP) option if RSI is below 30 or a Put (DOWN) option if RSI is above 70.
Step 4 – Manage Your Expiry Time
For binary options, match expiry time to the timeframe of your analysis—shorter for 1-min charts, longer for 15-min charts.
Example RSI Trade on Quotex
Imagine you’re trading EUR/USD on a 5-minute chart:
- The Index down until 25 at a major support level.
- A bullish engulfing candle forms.
- You place a Call option with a 5-minute expiry on Quotex.
- Price rises, and your trade finishes in profit.
- This combination of RSI signal + support level + candlestick confirmation increases accuracy.
Common Mistakes to Avoid When Using RSI
- Overtrading Every Signal – Not every overbought/oversold condition results in reversal.
- Ignoring Market Trends – RSI works best in ranging markets; in strong trends, it can stay overbought/oversold for long periods.
- Not Adjusting Period Settings – For fast markets, shorter periods like RSI(7) can give earlier signals.
Advanced RSI Tips for Quotex Traders
- Use RSI Divergence – If price makes a new high but RSI doesn’t, a reversal may be coming.
- Combine RSI with Moving Averages – MA confirms the main trend; RSI times the entry.
- Adjust RSI for Different Assets – Cryptocurrencies may need faster settings due to volatility.
RSI vs. Other Indicators for Binary Options
- MACD – Better for trend confirmation, slower to signal reversals.
- Bollinger Bands – Great for volatility; RSI excels in momentum shifts.
- Stochastic Oscillator – Almost same as RSI but its more sensitive.
Frequently Asked Questions (FAQ)
Q1: How ti make best settings on RSI for Quotex trading?
A standard 14-period RSI works for most markets, but 7-period is better for short-term trades.
Q2: Can I use RSI alone?
It’s possible, but combining it with price action or support/resistance is more reliable.
Q3: Is RSI good for all asset types?
Yes, but it works best on liquid, actively traded markets like major forex pairs and popular cryptocurrencies.
Final Thoughts and Risk Reminder
The RSI strategy is a proven method to enhance binary options trading. When applied correctly on Quotex, it can help identify high-probability setups and improve win rates.
However, remember: no indicator is perfect. Always practice risk management and test strategies in a demo account before trading with real money.