here's an actual photo of the RSIindicator that bucket needs to be a little bigger though and here we are atthe RSI video not too long ago I made the ATR video which is the single bestindicator you can possibly use make sure you see that video if you haven't
you'regoing to want to but I also before that made a video called the Dirty Dozen andwe're gonna look at that in just a moment and this is the first item onthat Dirty Dozen list and I'm gonna go over because indicators wise at least itis the absolute worst so
in this video I'm going to show you why the RSI is aterrible option for your Forex charts now I understand there are a fewdifferent types of people watching this either you are already a fan ofno-nonsense Forex and you've seen the Dirty Dozen video and you understand whyI do
what I do and you are probably never ever going to use the RSI thereare some of you who are just starting out trading for the first time and don'tknow what to use and are looking for a direction and videos like this aretailor-made just for you and there are
some of you who are using the RSI rightnow and actually like it you guys are the ones that I need to talk to the mostwatch this entire video and at the end of it if you are still on board with theRSI I cannot stop you at the end
of the day it is your money but for the rest ofyou – there's a lot of good knowledge in this video and I'm gonna go to my owncharts towards the end don't fast forward all the way to the end becauseit's not gonna make a whole lot of sense
if you do but I'm gonna cover quite abit here so if you are new to the channel and you have not seen the DirtyDozen of it a video here is the list these are twelve of the top tools that Ican guarantee you if you're actively trading Forex right
now and you have notseen one of my videos before that you are using at least one of these and inthat video which I will link below so you can see it later I gave a little 30second to 45 second blurb on every one of these showing people howfaulty
and outdated and ridiculous these tools are and I also said in that videothat I would go back and make an individual video on every single one ofthese and it is the RSIs turn and I wanted to start here because out of pureindicators in terms of Google searches that
these get googling RSI or relativestrength index will yield you more Google searches than anything else onthis entire list when it comes to pure indicators and I want to kind of keepthe indicators train going here so if you didn't see the Dirty Dozen videoalready here is what I said
about the RSI so first off it was created in 1978spot forex trading as you and I know it wasn't even really around until 1996 andthis thing was created almost 20 years before it and is crated for stocktrading which does not operate in the same way Forex does mainly
because instock trading things can actually be overbought and oversold but in forexthat's not the case watch my reversals video I'll link that one down below tostocks actually have intrinsic value they can by definition be overbought oroversold currency pairs can go as high or low as they want until
a governmententity actually steps in and does something about it but that can happenthree thousand five thousand pips down the road so just by how old this thingis what it was actually created for which was not forex and what it istrying to do you can just stop here and
many people saw this and said ok yeahI'm not using this anymore that's all all the information I need all theevidence I need but some of you are gonna be a little bit of a tougher sellso let's go ahead and move on now what I really want to know
and the people whouse the RSI right now are the people I'm talking to why do you use it I alreadyknow the reasons why and we're gonna go over those reasons one by one and I'mgonna try to dispel them one by one to see if I can talk you
off this ledgefirst off you probably use it because it's very easy to use and I agree it isfor those of you who are brand brand new to forex trading and don't know how touse the RSI it goes something like this now there are a couple different ways touse
it but the way almost everybody who uses this indicator will actually use itfor is they're gonna wait until this line gets down into now I'm using airquotes oversold territory and then they wait until the line comes back up acrossthe thirty you set your levels at 70 and 30
when this line gets back across the30 that is a signal for you to go long because it is confirming what they thinkis a reversal and so then conversely if the line were to ever get up into thisoverbought territory above 70 you would wait for it to come back
down and onceit does that will give you a short entry real simple super easy to useI agree but this point will come into play later all right let's keep goingwhy else might you use it well it's extremely popular you see a lot ofpeople on Twitter and on different
web sites and even on YouTube using the RSIand you figure well this many people are using it I should probably be using ittoo who doesn't want to be popular who doesn't want to follow the crowd thesepeople seem like they know what they're doing and again between RSI indicatorand
relative strength index this thing it's about 25,000 searches on Googleevery single month if you didn't know any better and when you first start outyou didn't know any better you would think well this is the way to go and nowfans have no nonsense Forex they're already screaming the answer
at you ifyou're popular you're done because you are now part of that 99% that and thisnumber is low when I say low it's probably closer to 100% than it is 99%99% of traders who forex traders who either lose money breakeven or neverquite make enough money to get where
they can actually distance themselvesfrom their regular job and start doing this for a living which is what mostpeople almost everybody I've talked to that actually trades ultimately want todo and if you are doing the things in forex that are popular this is where youare going to end up
because another video I've made probably the mostimportant video I've made up to this point the Big Banks videobig banks eat the popular kids they find out where the popular money is going andthey take it they move by moving price the other way it's really really simpleif you don't
understand what I'm saying please go watch this video after you'redone I'm gonna link that one below too but just know this so many people usethe RSI and if it is giving so many people a long signal for example youhave become a huge blip on the big banks radar
and that is giving them permissionto take price the other way whenever they want they might give you a win hereand there just to keep you in the game we'll talk about that in a bit too butthis is not stock trading this is not the herd mentality the mechanics
of thismarket move the exact opposite you do not want to be popular at alland if you were doing anything that would make it so that would make youthat way you need to change right away and things like that big banks videowill explain further because I know when I
first tell people this it's kind ofhard to believe so another reason you use it is you were shown from the startthis is a big one and this is I've major problems with Forex education in the wayit teaches people from the start and that's a big reason why videos
like thisexist people have said hey you should you should put up your own trainingcourse and I don't want to do that I just I would rather wait for you to goget your training somewhere else and say ok now that you've learned this here'swhat you should actually do but
when you were first taught Forex from the startit was super exciting because you learned all these little tools andindicators and I guarantee you no matter who taught you every example they gaveyou works like a charm gave you that perfect entry every time which is supersuper unrealistic you learn
that the hard way as soon as you get out thereand started trading yourself but the RSI because it is so easy to use and easy toread told you that with the least amount of effort all I have to do is put thison my chart and every time it
gives me a signal just take it it's super easy andthat is a reason why so many people still use it and put it on their chartsbut did you ever once question the people that were showing you how totrade you probably didn't hear some dirty little secretsabout anybody who's
associated with Forex education at the beginner levelmost of them don't actually trade if people are in the forex industry andthey are making money by being instructors by being news reporterswhatever they do most of them don't actually have to trade anymore believeme if they did if they had to
rely on the money they actually made by tradingthey wouldn't be using hardly any of the things they were going to show youbecause they would lose but I'm telling you you right now could just take allthe things you learned when you first learn how to trade Forex repackage themand
put them under your own name and put it out there and make money people wouldbuy it especially if you're good at marketing because people just don't knowany better they're not gonna question your ability to trade yourself they justwant to learn and showing them things dumb dumb things like
the RSI andFibonacci and stuff like that especially if you should only show them examplesthat work well you're gonna get them on your side every time this is a problemalso most of these people don't even know about other indicators they knowabout what's on the Dirty Dozen and maybe two
or three other tools they canput on their chart and their knowledge stops there most traders knowledge stopsthere there are thousands of indicators and tools that you can put on your Forexchart at any given time most people only know about fifteen to twenty maximum Iam blown away by this
never once did these people stop and say you know whatI just keep losing these indicators are terrible maybe there is another way Idid that and over time I had tested thousands of indicators on all differenttime frames on all different currency pairs to get to the ones I use
now andguess what guys there are indicators that were actually developed by forextraders in this century for the purpose of forex trading which is the oppositeof everything you saw on that Dirty Dozen video but did any of theseinstructors ever have the gall to show it to youno because they
didn't know either they showed you the RSI and that's why you'relosing and and I've alluded to this already the worst thing about it is andthis isn't just an education this is everywhere this is all over Twitterfor one and I'm not the type to talk shit to people on
Twitter but you reallyreally want to when you see things like this because it just just irks peoplelike me when you first saw the examples they showed you you thought to yourselfwow look at how well this works it must work every time what you didn't know isthat they selected
the perfect currency pair on the perfect time frame at thatone perfect moment in time where this indicator worked really really well andshit like that drives me crazy and the funniest part about when they do it withthe RSI is if you actually look at it on some of these
examples it still doesn'twork I'll show you this is great I don't know who did this or where this is frombut this is a clear example of you being lazy and thinking this thing works whenit actually doesn't so here's the overbought side of things and thenthere's two different times
it gives you a signal to go short and price dideventually go short over here two different times you could have gone longand price eventually went long but let's look at this more closely so your firstsignal to go short is here alright right here now I'm using a mouse
so I'm goingto go straight up as I can so that signal was on this candle right here nowthe very next candle shot upward this candle took out a lot of people's stoplosses and after it closed a lot of people probably looked at that becausethat's an engulfing candle which
for a lot of people is a sign that price isgoing the other way and they said yeah it's time to exit and move on now if youweren't one of those people that's fine if you would have said okay my stop-losswould have actually been up here or maybe even
up here okay I'll go withthat but for a lot of people they exited right after this candle and then theindicator itself moved back into that overbought territory with this candleright here so now your beloved indicator is telling you that this thingis back into overbought territory so are you
going to go short at this point? noyou you've just been given another reason toexit so let's say you did not exit and you're still in this trade okay so itgoes down a little bit back to where you bought it went back up and then youfinally get this down
candle here now if you're honestly sitting there sayingwell this would have hit my take profit mark I will say probably not if youreally are somebody who had their stop-loss this high your take profitlevel was probably somewhere down here if not lowerso I will call bullshit on that and
then price went back up again and then downand back up again if you are one of the very very few people who were still inthis trade and believe you me if you are a sane minded discipline trader youwould have been out of this trade a long time ago
but for some reason you're alunatic and you stayed in it you would have actually reaped the rewards to apoint and rode it on the way down so good for you if that was the case Idon't like your chances going forward if that's the type of trader you are
butjust understand that most people would have been out a long time ago and nothave made any money from this move here because especially when this thing wasdoing a whole bunch of nothing this indicator was going down usually whenpeople see indicators going down and price going nowherethat's a yet
another sign to exit all right so we're gonna let's go lookat the more ridiculous example which is are these two Long's right here let'sstart with this one this one gave you a long entry on this candle right here andthen what immediately happened after that these two huge short
candles nobodywas left in this trade if you're the type of person said well I would havebeen because my stop-loss is way down here I don't believe you and if for somereason you are it will not be long until you lose all of your money if that's howyou approach
trading any sane minded trader would have been long gone evenway before price is allowed to get this far down that was a huge loss all rightso let's wait for the next long entry which is this arrow right here oh thatis probably this candle right here so thisgave you
a whole lot of nothing and then the very next day boom this huge marabozu short candle down bad bad news again nobody would have been left inthis long trade but if you were being lazy and looking at it in hindsight youwould have said Wow it was overbought there
and price went down it wasoversold here and price went up but if you're looking at it as an actual tradereven when it works it just gave you four different losses how about that the RSIis one of the few indicators out there that even when it works it doesn't
workbut look I'm not mad at you for using it you have a lot of reasons why especiallystarting out that you would have used it you know these are perfectly validreasons if you didn't know any better but another big reason that I have anyin touched on yet is the
RSI is one of the most televised indicators out thereif you were somebody who watches CNBC or a Bloomberg you will whenever theyactually make some desperate attempt to show technical analysis you will seethis indicator a lot so Bloomberg mostly does stocks but this is an example of achart you
would see with them as you see this weekly RSI below and then here isanother chart so they do have a habit of using it and why do they use it becauseit's very easy to see like we said before people who watch these showsusually know nothing about technical analysis
and so you need to show themthe easiest dumbest thing you can possibly show them or else they're notgoing to understand what you're doing now Bloomberg actually has the decencyto put currencies up every once in a while and they'll use the RSI toobecause especially when you shade in these
little overbought and oversoldlevels they're a lot easier to see and understand than an indicator thatactually works but if you're the type of person that started using the RSI andthen saw all these smart people on TV using it too no wonder you're stillusing it now and no wonder you're
still in the back of your mind trying to argueme on these points but let's take a look at what really happens on these showsfor one they are not technical traders Bloomberg and especially CNBC spendspretty much all their time on fundamental analysisbecause that's what the people who watch those
shows want to see most of thesepeople too are not even traders again they wear nice suits they have theseprestigious jobs they speak really well they're not actual traders more oftenthan not and if they are they're definitely not forex traders you'll seesome legit stock traders on there I'm sure
but actual technical forex tradersalmost never exist in this world for some reason and again neither is theiraudience the people they are talking to don't know anything about technicalanalysis so if you're showing technical analysis to a bunch of people who haveno idea what you're talking about the best thing
to show them is somethingdumb and easy like the RSI so don't think that just because you see it on TVthat it is more valid than anything else out there they're using it because it'seasy and they're also using it because again like all those instructors whoactually have studied technical
analysis at some point they don't know any betterthey don't know about all the other indicators out there that work much muchbetter so let's go ahead and touch on the last reason that I will bet is oneof the reasons why you still use the RSI and that's because you've
had somesuccess with it before and I went over this in the big banks video – it'scalled blackjack theory or Vegas theory if you were to go to a blackjack tablefor the first time and on the very first hand you would have actually gotten ablackjack and gotten that two
to one or six to five pay off you know whateverthey do that feeling is so intense that you would allow yourself to lose thenext five to ten hands before ever even thinking to yourself okay maybe thisisn't the right game for me and God forbid in the next ten
hands after thatif you were to actually win three or four of them well then they got youyou'll sit there and lose all your money and take it all the way down to zerobefore realizing what's really going on here and the same can be said for theRSI the big
banks will give you a win with these things sometimes because ifthey didn't then you're just going to quit but if they just give you a winhere and there it is enough for you to hang on to this thing because the thrillof winning is so strong that it overrides
any of the losses you mighthave in the future but if were to just do this if you were to justmake a separate demo account and do nothing but trade with the RSI andnothing else and track those wins and losses for two months and see where youactually were I
bet it's gonna paint a really sobering picture but most peopledon't have the discipline to go out and do something like that and to testthings that way they're so stuck in the euphoria of those times where itactually works they will ignore the times when it doesn't and when they
lookat their account at the end of the year it is way down so let's transition outof the reasons why you probably use and I'll just tell you the reasons why Idon't like it don't forget the earlier slide the Dirty Dozen slide a lot oftimes this was a reason
enough for most people to say oh wow what am i doingyeah I need to move on to something different there are clearly betteroptions out there but let's just say that did not convince you the RSI doesnot even do a good job at what it is supposed to do
remember that example Ishowed you before whereas trying to show you how well it worked and it ended upbeing complete calamity to your trading account often even when it looks like itworks it doesn't work and on top of this it was created for stock trading Iactually know some professional
stock traders many of which will actually usea combination of technical analysis and fundamental analysis because that's whatyou you're supposed to do when stock trading and none of them use the RSIsome of them did but as soon as they were introduced to better options theyget rid of the RSI
or right away it did not take long sometimes it's just amatter of being shown a better option which we here on No Nonsense Forex aregoing to do so if you haven't subscribed by now subscribe because you're gonnawant to see this now there is an a counter-argument to this
and it is anargument I have a really big problem with they say well the RSI does workreally well in range-bound markets in trends it doesn't work at all you getmurdered but in range bound markets it actuallyworks well so what do I mean by that if you don't understand
what that meansso when price consolidates and falls into this little range right here andwhen we say a range pretty much means it's hittinga line here and a line here and when it does that people want to convince youthat now this market is very easy to trade because it's
gonna bounce off hereand if you're using the RSI it's gonna give you a really nice short signal andwhen it comes here it's gonna give you a really nice long signal here is theproblem I have with this guys you don't know when a range is coming it'd be soawesome
if we did if we were just be if we're just able to pick out some randompoint on a chart and be like hey okay consolidation is just around the cornerget all your range trading tools out and we're gonna we're gonna make a lot ofmoney but it doesn't happen
that way you only know it when it's too late onceyou see a range actually forming it is probably about to end I love people whoshow trend lines and support and resistance lines like look how manytimes this thing has hit this line by the time it has done that
it is almostover so understand this is not an actual chart this is just a drawing so how manytimes this hit 1 2 3 4 5 6 7 8 times you almost never ever see that and if you doit is only a matter of time before price breaks out
of that range it startstrending and if you're trading a quote range bound market you are going to getsmashed because when price does trend and you're trying to use these reversalindicators you get absolutely destroyed go watch that reversals video if youever want to know why a price trends as
long as it does sometimes it's becausethere are an endless supply of reversal traders with their stochastic sand theirRSI trying to call reversals and as long as those people outnumber the people whoare actually following the trend price is going to keep going and these poorreversal traders just get smoked
over and over and over again any money theymade when price was consolidating is erased immediately and then the lossesstart happening so let's go ahead and go to my charts and I will show you notcherry-picked examples but actually real world right now examples of how thisthing just completely fall
apart so here is what I've done let's goahead and push this forward just a bit this is a let's put it back even thisright here is about one year's worth of data on the most popular traded currencypair by far and we're on the daily chart which is the
time frame that everybodyshould be trading if you didn't already know that that was a podcast episodeI'll link that down below too but I went ahead and put the RSI down below on thedefault setting that almost everybody uses and let's go ahead and see on theworld's biggest stage not
some cherry-picked example on the mostpopular example I could possibly give you let's see how well this thing worksnow didn't give you any signals for a while and then finally gave you a littleone right there so let's go ahead and pull up a cursor and see how well thatwould
have done now it wants you to go short right here on this candle here nowvery next candle shot up about 70 pips if you would have stayed in that tradeyou're telling me your stop-loss is more up here so by the time it actually didgive you some profit it
didn't even give you a hundred pips with a profit on thedaily chart chances are like I said before if your stop-loss is up here yourtake profit is down here somewhere and you did not profit on this trade and ifyou didn't look out because price shot back up right
afterwards now let's lookhere we are now in overbought territory and you have a signal here let's checkthat one out that would have come on this candle right here the RSI istelling you to go short right on this bar and you didn't make anything you mayyou made 14 pips
on the daily chart immediately this thing shot way up againthat would have been a tremendous loss depending on where your stop-loss wasnow the next one this one it's hard to say I'm gonna be nice andgive this one a pass because it's so borderline but your next one was
hereand I think this one actually worked let's see you guys want to zoom in Ithink it might be better if we just zoom in on this so you can see this a littlebetter this one told you to enter it was at this candle oh is this candle here
sothis one did go down some and you probably made a little bit there youdidn't make a lot but there was definitely room to take some profitthere but it didn't give you that nice trend that you were wanting on thereversal it came up back back up pretty quick so
if you took half off down herehalf as all you got because this thing shot right back upwards so in thislittle cluster of shorts it gave you there was some really bad losses and onemedium-sized win maybe and that was it so let's move over to here we're nowyou're getting
long signals this was technically one it got up there you cansee on that little tag here the RSI is thirty point nine four so it did closeabove that that would have given you a long signal let's see how that did Idon't think it's too hard to recognize that
that did nothing but go short youwent long price did nothing but go short that that was really bad really bad lookat the next one on that little retracement it gave you another longentry where was it right here alright well how many pips were you wanting onthe daily chart
hopefully you're wanting more than 80 87 you might have again youmight have taken a little bit of profit there but for the most part you got notrend that you wanted and you got nothing but futility all the way downagain this thing just keeps on killing you how about
this one this one wasactually good this was the win this is the win they used to keep you in thegame because this one from the start did you well didn't do you great like Isaid you want on the daily chart you were hoping to gain more than 150
pipsmax but it did give you a win and then over here it is yet to be seen but let'szoom back out after all that all those entries you had two little to medium winsand a bunch of losses on the world's biggest Forex stage on one of the mostcommonly
used indicators on earth terrible and this is a currency pairthat not only trended but did quote range to actually don't even know ifthat can you really consider that arranged there's your top there's thebottom it didn't really touch anything so yeah a lot of people would call thisa range
it's not even a range and there is no money to be made here when itcomes time to actually prove it this thing just completely falls apartalright we'll move on so I mean have I given you enough evidence at this pointI mean in conclusion it's real simple don't use
the RSI ever I mean the goodnews is there are much much better options out there and we're going to betalking about them over time and I'm going to bet you're going to want toknow what those are and the best way to find out is to subscribe to this
channelI mean I have given you so much evidence of why this thing is terrible and everyother youtube channel out there and twitter handle that actually uses thisthing is not doing that they're showing you why it is a good idea to use the RSIand then you wonder why you
end up like the 99% this channel has not been aroundvery long and I have already changed traders results instantaneously simplyby getting rid of something they're already using that isn't working justimagine how far along you're gonna be when this is all said and done butyou're not gonna get there
with these other YouTube channels and these Twitterfeeds that are showing you the same dumb garbage over and over again there's noway you're gonna be in that 99% your whole life and that's not why you gotinto forex trading in the first place if you want to really get there
click onthe links below on some of my other videos and start changing the way youthink about everything into that point one percent mentalityand in return I will make sure that every single video I make from here onout is designed to get you that much closer and closer to
getting out of that99 percent and getting into that point one percent for good I will see you onthe podcast and I will see you in the next video as well all right guys go getit
