Kathy Lien
BKTraders and Prop Traders Edge
Most traders don't realize that the conventional way they've been taught to use RSI is actually setting them up for failure. After two decades of trading, starting on the JP Morgan Chase trading desk on Wall Street, I've discovered why the widely taught RSI strategy keeps traders getting stopped out while professionals profit from the same indicator. It's time to abandon the textbook approach and master how RSI was truly designed to work.
Key insights:
- Revolutionary RSI strategy: Why buying at 30 and selling at 70 is amateur hour, and how using the 50 level for confirmation creates dramatically better entries with higher win rates.
- Trend-following mastery: Learn why fighting overbought/oversold conditions destroys accounts, and how to ride market momentum instead of catching falling knives during crashes.
- Perfect entry timing: My exact step-by-step method for waiting for market confirmation before entering, eliminating the guesswork that causes most RSI trades to fail immediately.
- Advanced risk management: How to position stops at swing lows and trail with moving averages for 2:1 and 3:1 risk-reward ratios while letting winners run.
This isn't just about tweaking RSI settings - it's about understanding why the market can stay "overbought" or "oversold" much longer than most traders expect. When earnings disappoint or central banks shift policy, there's usually a fundamental reason behind strong directional moves. By waiting for the 50-level confirmation, you're trading WITH the emerging trend instead of against it. Learn why patience eliminates losing trades, how to avoid the trap of premature entries, and the exact mindset shift from "catching reversals" to "confirming momentum." This strategy works across all timeframes and markets because it respects what RSI was originally designed to measure - not predict tops and bottoms, but confirm when momentum is actually shifting in your favor.
Past performance is not indicative of future results. Trading forex carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products, you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts.
Editors’ Picks
EUR/USD struggles aroound 1.1800 as USD stabilizes
EUR/USD stays defensive around 1.1800 in the European session on Thursday. The US Dollar stabilizes, following the recent decline led by tariff uncertainty, capping the pair's upside. All eyes now remain on the US-Iran nuclear talks after ECB President Lagarde's testimony fails to impress Euro bulls.
GBP/USD drops toward 1.3500 as USD finds fresh demand
GBP/USD falls back toward 1.3500 in the European session on Thursday, snapping its recovery momentum. The pair loses traction as the US Dollar finds fresh demand, as markets turn cautious ahead of the US-Iran nuclear talks. The US trade policy uncertainty also remains a drag on risk sentiment.
USD/JPY recovers above 156.00 despite cautious markets
USD/JPY is cutting losses to regain 156.00 in the European session on Thursday. The pair recovers alongside the US Dollar, but the further upswing appears limited amid hawkish BoJ commentary, looming intervention fears and risk-off mood, which continue to support the Japanese Yen. US-Iran nuclear talks take center stage.
Editors’ Picks
EUR/USD struggles aroound 1.1800 as USD stabilizes
EUR/USD stays defensive around 1.1800 in the European session on Thursday. The US Dollar stabilizes, following the recent decline led by tariff uncertainty, capping the pair's upside. All eyes now remain on the US-Iran nuclear talks after ECB President Lagarde's testimony fails to impress Euro bulls.
GBP/USD drops toward 1.3500 as USD finds fresh demand
GBP/USD falls back toward 1.3500 in the European session on Thursday, snapping its recovery momentum. The pair loses traction as the US Dollar finds fresh demand, as markets turn cautious ahead of the US-Iran nuclear talks. The US trade policy uncertainty also remains a drag on risk sentiment.
Gold clings to gains amid sustained safe-haven flows ahead of US-Iran talks
Gold sticks to its modest intraday gains through the first half of the European session on Thursday, with bulls still awaiting a sustained move and acceptance above the $5,200 mark before placing fresh bets.
Stellar: Relief bounce fades as bearish undertone persists
Stellar is trading around $0.16 at the time of writing on Thursday after rebounding more than 8% in the previous day. Derivatives data paints a negative picture as XLM’s short bets hit a monthly high while Open Interest continues to decline.
The one thing everyone is on the lookout for is US action of some sort against Iran
The FX market is minestrone soup these days. It is befuddled by conflicting data, rumors and small stories exaggerated out of proportion, and Trump-generated uncertainty.
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