Aim to become both a sunny temperament and a fully-fledged trader! Learn FX with Nanamin, Episode 13
Nanami Hiwa, an actress and investor, joins with Yasuji Yamauchi, an FX specialist, to learn together what is necessary to profit in FX and to improve trading performance. In this issue, as an application of technical analysis, a custom indicator will be introduced.
*This article is a reprint and revision of an article from FX Jukaku.com August 2020 issue. Please note that the market information written in the body may differ from the current market.
Click here for the list of serialized articles
【Table of Contents】Aim to become a proper trader with Nanami Hiwa! Learn FX with Nanamin
Profile of Yasuji Yamauchi
Yamauchi Yasushi. Joined American Bank in 1982, became Vice President in 1989, Proprietary Manager in 1993. Joined Nikko Securities in 1997, became Deputy Manager of the Foreign Exchange Funds Department at Nikko City Trust Bank in 1999. Founded Ascendant Inc. and became Director in 2002.
Official Blog：Ascendant/Yamauchi Yasushi provides a foreign exchange information distribution site
Twitter：https://twitter.com/yasujiy
Profile of Nanami Hiwa
Hiwa Nanami. Formerly Nonaka Nanami, renamed to Hiwa Nanami. Affiliated with Tezuka Koji Office. Active as an actress and investor, appearing in movies, stage plays, and commercials, as well as hosting a regular program on Radio NIKKEI. The blog updates daily trading activity.
Official Blog：FX Actress Arrives! The Serious Real-Time Trading Diary of New Actress Nanamin
Twitter：https://twitter.com/himnas03
Indicator where RSI is substituted into Stochastic
HiwaSince the previous issue, Mr. Yamauchi has recommended a custom indicator. This time, we start with “Stochastic RSI.”
YamauchiThe base of calculation is the Stochastic. Normally it uses the four-price data of high, low, open, and close, but this Stochastic RSI uses the RSI value instead of the four-price values. By using the RSI, which reflects market overheating, the stochastic changes more violently compared to the four-price data. The caution is that while small fluctuations are reflected, false signals may increase (Image ①).
HiwaEven a small price move causes the indicator to change significantly, doesn’t it?
YamauchiThis is true for any technical indicator, so try to leverage the advantages. It can be viewed with the Stochastic or the RSI, but keep it as simple as possible. Chart ① shows TradingView’s Stochastic RSI displayed on the daily GBP/JPY. The parameters use default values, displaying only %D. Simply look at whether %D indicates overbought or oversold. Earlier, in the explanation of oscillator-type indicators, do you remember the discussion on “zone exits”?
