Forex trading strategy #4 (RSI High-Low)
Submitted by Edward Revy on February 28, 2007 - 14:14.
Although no trading system can solely rely on RSI indicator, using it in combination with other tools and proper technical analysis can bring a new edge to your Forex trading.
Setup:
Currency pair: Any.
Time frame: Any.
Indicator: RSI (14) with levels at 70 and 30.
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Shadows won't affect this strategy.
Regards,
Edward.
Hi Edward,
What does the numerals after the RSI mean? That is RSI 14,3,3; RSI 7,3,3.
RSI (14, 70, 30) stands for RSI 14 and two levels/horizontal lines at 70 and 30.
14 is a standard period for this indicator.
Regards,
Edward
"WHAT WOULD BE THE MEANING IF SHADOWS FORM ABOVE OR BELOW A CANDLE STICK?"
What are those shaddows???
Shadows are the tails above and below the candlestick body.
Here is an illustration:
Regards,
Edward
Hi Edward,
I have a question about the first comment.
Someone suggested GBP/USD 5 minute chart and RSI(7).
Does he/she suggests Take Profit 10 pips after entering the position?
When do i exactly enter the position? Is it when the RSI climbs abuve 70 and crosses 70 going down?
Where do i set the stop loss in this case? If t/p is 10 pips?
P.S. Excellent Website!!!!!!!!!
Thank you,
with 5 min trading and according to the first User comment it would look next way:
When the RSI climbs above 70 and then crosses 70 down - Sell. When the RSI dips below 30 and then later crosses 30 on the way up - Buy.
Profit target is 10 pips.
Stop loss on 5 min can be set to 10 pips as well; or below the most recent swing low / above swing high if they happen to be reasonably close.
Regards,
Edward.
Hi everyone!
I tried the strategy posted at top of this forum. It sounds nice, and I added 2 indicators: An Exponential Moving Average 200, close and fractals.
EMA 200 gives you the trend to follow (prices up EMA = buy, prices down EMA = sell) and fractals helps to find extreme points where you can get in or get out of the market.
Test it, and please, comment your results!
Have a nice trading!!
CARLOS ALBERTO CASTILLO SANCHEZ
Bogotá, Colombia
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