How Can Prop Traders Leverage RSI

Relative Strength Index (RSI) is one of the most widely used tools by Prop Firm Traders. This concept was developed by J. Welles Wilder Jr. and introduced in 1978 in a book named “New Concepts in Technical Trading Systems”. This indicator is available on almost all trading platforms.

The Secret to Success is Solid Money Management

The secret to success is solid money management, a subject that is widely ignored.

Why Moving Average is Considered a Key Concept in Prop Trading

The concept of moving average is prominent in prop trading. The traders make crucial decisions based on the outcome of these calculations. To understand this better, let’s take an example: assume the price of an instrument for the last 5 days is $10, $12, $15, $17, $20 – the total is $74, and when divided by 5 days the moving average comes to be $14.8. This is called the Simple Moving Average (SMA) and helps understand the overall trend and mitigate the recency effect. Now, that the concept is clear let’s dwell on its further parts and understand how a prop trader benefits from its usage.