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Modern Management Review (dawna nazwa: Zarządzanie i Marketing)

Modern Management Review
(dawna nazwa: Zarządzanie i Marketing)
25 (4/2018), DOI: 10.7862/rz.2018.mmr.39

USING THE RELATIVE STRENGTH INDEX FOR ACTIVE INVESTMENTS IN THE FOREIGN EXCHANGE MARKET

Ceslovas BARTKUS
Submitted by: Paweł Perz

DOI: 10.7862/rz.2018.mmr.39

Abstract

The Foreign Exchange market is constantly affected by a huge amount of economic and political events, such as decisions of Central banks, changes of various economic ratios, elections, official announcements of country leaders, etc. Various investors, financiers and scientists had created many economic ratios, mathematical formulas and investing strategies to help improve the results of investments in financial instruments. The paper presents and discusses the data collected using the American analyst’s Welles Wilder’s Relative Strength Index in spot trades of the European Euro and the United States dollar pair. All data has been gathered from 01-01-2016 to 01-07-2017 and analyzed from a few points of view. The aim of this research is to find the best Relative Strength Index modification for trading in FOREX market. The research departed from classic Relative Strength Index to more sensitive modifications of original formula.Eight trading scenarios have been investigated with eight different Relative Strength Index modifications. Only one of them had positive result on return despite most of scenarios had the accuracy above 50%. The article analyzes the reasons of trading losses also. The index was wrong when strong fundamental factors such as speeches of the ECB and FED heads took place. These mistakes brought trading losses of more than 2% unprofitability each. All work was based on the literature analysis of different authors from different countries and information from the FOREX brokers.

Full text (pdf)

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About this Article

TITLE:
USING THE RELATIVE STRENGTH INDEX FOR ACTIVE INVESTMENTS IN THE FOREIGN EXCHANGE MARKET

AUTHORS:
Ceslovas BARTKUS

AUTHORS AFFILIATIONS:
Faculty of Social Sciences, Panevezys University of Applied Sciences,  Laisves a. 23, Panevezys LT-35200, Lithuania

SUBMITTED BY:
Paweł Perz

JOURNAL:
Modern Management Review
25 (4/2018)

KEY WORDS AND PHRASES:
financial markets, FOREX, Relative Strength Index.

FULL TEXT:
http://doi.prz.edu.pl/pl/pdf/zim/358

DOI:
10.7862/rz.2018.mmr.39

URL:
http://dx.doi.org/10.7862/rz.2018.mmr.39

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