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Recommendations that change your life
Recommendations that change your life
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The RSI Double wave reversal system
Introduction
set of waves in the other direction a trend is indicated. If they are more or less the same the market is trading sideways. One could almost trade
set of waves in the other direction a trend is indicated. If they are more or less the same the market is trading sideways. One could almost trade
the market looking at the movement on the RSI without any reference to the price chart.
the market looking at the movement on the RSI without any reference to the price chart.
Why we have chosen the RSI is because it is a leading indicator. In other words it gives an indication of what will happen in the future. This will
become clearer the more you use this trading system. Lagging indicator such as a moving average which tells you what has happened.
Setting up the RSI
When setting up the RSI you need to ensure that the 50 line and the 75 and 25 line are drawn in.
The RSI will have period setting which you can set at 4 for purposes of the test. 4 means that the levels of the indicator will be determined by the
last 4 time period of the chart.
The price chart can be set to candles.
Introduction
set of waves in the other direction a trend is indicated. If they are more or less the same the market is trading sideways. One could almost trade
set of waves in the other direction a trend is indicated. If they are more or less the same the market is trading sideways. One could almost trade
the market looking at the movement on the RSI without any reference to the price chart.
the market looking at the movement on the RSI without any reference to the price chart.
Why we have chosen the RSI is because it is a leading indicator. In other words it gives an indication of what will happen in the future. This will
become clearer the more you use this trading system. Lagging indicator such as a moving average which tells you what has happened.
Setting up the RSI
When setting up the RSI you need to ensure that the 50 line and the 75 and 25 line are drawn in.
The RSI will have period setting which you can set at 4 for purposes of the test. 4 means that the levels of the indicator will be determined by the
last 4 time period of the chart.
The price chart can be set to candles.
When to take readings of the RSI
Trading signals will be determined by the status of the closing candle. In other words reading of the indicator will be taken at the start of a new
candle (or trading period) based on where the previous candle closed.
Why we do this is that the indicator bounces up and down during an open trading period but only stabilizes when the a new candle starts
forming.
The trading signal
The trading trigger that we are going to use is a trendline violation occurs after the RSI has traded past the 75 line for sells (or 25 line for buys).
The trendline must also have gone go through the 0 line.
Trendlines are drawn joining the peaks and valley turning points made by the RSI.
The RSI must have traded past the 75 line for sell (25 line for buys) for the trendline violation to be valid.
Refining your trades
These are suggestion to increase the chance of success and don't all need to be present to trade.
1. The size (thickness) of the RSI waves increases the potential of success.
2. It is sometimes good it there is a simultaneous or potential trendline violation of the price charts. Because the RSI is a leading indicator the
trendline violation is likely to occur on the RSI before it happens on the price chart or at the same time.
3. A divergence between the RSI and the price chart increases the chances of a successful transaction.
4. It is some times good to refer to a higher time frame chart to make sure that they support the trade with signals in the similar direction.
These are suggestion to increase the chance of success and don't all need to be present to trade.
1. The size (thickness) of the RSI waves increases the potential of success.
2. It is sometimes good it there is a simultaneous or potential trendline violation of the price charts. Because the RSI is a leading indicator the
trendline violation is likely to occur on the RSI before it happens on the price chart or at the same time.
3. A divergence between the RSI and the price chart increases the chances of a successful transaction.
4. It is some times good to refer to a higher time frame chart to make sure that they support the trade with signals in the similar direction.
