Last Updated on March 2, 2025 by Arif Chowdhury
Ever felt like you’re just following the crowd in trading?
Wondering how to spot those “smart money” moves that could make or break your trading success?
You’re not alone.
As a seasoned Forex trader since 2015, I’ve grappled with these questions too.
But here’s the good news: combining the Relative Strength Index (RSI) with Time Segmented Volume (TSV) can give you a powerful edge.
Let’s dive into how you can use these tools to track smart money moves effectively.
Understanding RSI and TSV
RSI is a momentum oscillator that measures the speed and change of price movements. It ranges from 0 to 100, typically using the 70/30 levels as overbought and oversold indicators.
TSV, on the other hand, measures volume changes over time. It helps you see whether the volume is supporting the price movement or if it’s just noise.
Now, here’s why combining them is a game-changer:
- RSI alone might give false signals, especially in trending markets.
- TSV can confirm whether those signals are backed by significant trading volume.
Why This Combination Works
When using RSI with TSV, you get a clearer picture of market sentiment.
- If the RSI shows an overbought condition (above 70), but the TSV is declining, it’s a red flag. The price might reverse soon.
- Conversely, if the RSI is oversold (below 30) and TSV is rising, there’s a high chance that buyers are stepping in.
This combination allows you to filter out false signals and focus on what really matters.
Steps to Implement RSI + TSV
- Set Up Your Chart:
- Use a platform like MT4 or MT5.
- Add both the RSI and TSV indicators.
- Analyze RSI Levels:
- Watch for RSI crossing above 70 or below 30.
- These levels indicate potential reversal points.
- Check TSV Behavior:
- Confirm the RSI signal with TSV.
- Rising TSV with oversold RSI? Consider buying.
- Falling TSV with overbought RSI? Think about selling.
- Use Multiple Timeframes:
- Check higher timeframes for overall trends.
- This will give you context for your trades.
- Practice Risk Management:
- Always set stop-loss orders.
- Never risk more than 1-2% of your trading capital on a single trade.
Enhance Your Strategy with My EA Portfolio
To take your trading to the next level, consider integrating automation.
I’ve developed a portfolio of 16 sophisticated trading bots that utilize the RSI + TSV strategy among many others.
These bots are designed for long-term trading, focusing on capturing 200-350 pips.
Here’s what sets them apart:
- Diverse Algorithms: Each currency pair (EUR/USD, GBP/USD, USD/CHF, USD/JPY) has 3-4 bots to minimize correlated losses.
- Robust Performance: Backtested over 20 years, they thrive under various market conditions.
- Risk Mitigation: The multi-layered diversification reduces the chances of simultaneous losses.
And guess what? I’m offering this entire EA portfolio for FREE. Check it out here.
Common Pitfalls to Avoid
- Ignoring Volume: Don’t solely rely on RSI signals. Always check TSV.
- Overtrading: Stick to your strategy. Don’t chase trades based on emotions.
- Neglecting Market Conditions: Adapt your strategy based on whether the market is trending or ranging.
Trading with the Right Brokers
Finding the right broker is just as crucial as your trading strategy.
When selecting a broker, look for:
- Tight Spreads: Lower costs mean higher profitability.
- Fast Execution: Delays can eat into your gains.
- Strong Support: Good customer service is vital, especially in volatile markets.
I’ve tested several brokers and can recommend the best. Check out my top picks here.
Final Thoughts
Combining RSI and TSV can significantly enhance your trading strategy.
By tracking smart money moves, you can make more informed decisions.
And remember, leverage automation with my 16 trading bots to diversify your risk and maximize profits.
Don’t hesitate to explore the best brokers to ensure you’re set up for success.
Happy trading! 🚀