Forex trading strategy #4 (RSI High-Low)

Thank you Sasan, and welcome!

Regards,
Edward

Hi Edward
Thank you very much for this grate Site. Iam very new in The Forex market,
I have been trading With the Demo acounts about 2 months now.
This is a huge help for me to understand the tools in the Forex trader.
and the rest is just praktic. Iam a solid FAN of this Site.
Best regards
SASAN

Simply put: the higher time frame the stronger the signal.
If you see a signal on 4 hour time frame it means the long term momentum is inviting you to take actions, however, if you the same moment go to 30 min time frame you may notice that you have a good opportunity there as well or, for example, you have no favorable momentum yet, instead RSI tells you to wait a bit if you want to trade off 30 min charts.
Either way, you determine the time frame you like to trade with: long term or short term. Obviously when both time frames agree on a signal and direction a strong move across the charts will be seen.

Regards,
Edward

Hi Edward,
Which timeframe would be best to work with or would you suggest using the time frames.
Thanks. For example on a M30 chart the reading on the RSI is different from the H4 chart.
How should i interpet this same currency different time frame.
Thanks

Hi ! I have tried this method using the twisted method suggested my the 1st commentor..
and it works! the only drawback: you have to really monitor the screen and don't float your cash too long! take any profit that u can earn asap! I tried this and earn 4 pips within few seconds..

Hi Nils,

RSI: When you put RSI indicator on the chart it asks you about the RSI period you want to use. Default value for RSI indicator is 14-period RSI. If we talk about RSI (7), it means that when we add RSI indicator to the chart, we should change its value in the settings to "7".

Stochastic: Stochastic overbought/oversold areas by default are defined by 80 and 20 levels (and we look for crosses in this areas). However, it is also not rare to use 70 and 30 levels as oversold/bought areas for Stochastic.

RSI: "RSI (14, 70, 30)". I've just corrected it above to "RSI (14) with levels at 70 and 30". Thank you. I should've done that earlier. It is just my own way of writing strategy rules, which I use all the time, so I brought it here unconsciously. Sorry for misleading you.

RSI indicator always has just 1 parameter - the period.

"EMA 200, close" means that you use 200-period EMA applied to Close. This expression is commongly used among Metatrader 4 users, who has the option to apply Moving averages to Close, Open, High or Low.
On other platforms, if you have no options to change additional EMA parameters, all moving averages are applied to Close, which is default, standard settings.

Fractals: There is an illustration on fractals on page 5
Briefly, Fractals show price tops and bottoms, they help you to see those tops and bottoms on the chart. Since tops and bottoms (in other words, swings high and low) serve as support/resistance levels, traders use them for entries, placing stops, taking profits, calculating risks. Try to read some more info online about price Support and Resistance, and you will understand the value of Fractals better.

Regarding "price up/down EMA", could you quote the whole sentence, please?

Regards,
Edward

Hi Edward,

I have a question about the comment from Senor Catillo Sanchez - "EMA 200, close and fractals" - what does the ", close" refer to? What are fractals? How are they used?

Does prices up/down EMA mean that the EMA lines are moving upwards/downwards? As described at the beginning of the simple strategies section?

Thank you,

Nils

Hello,

"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."

Why do you set levels/horizontal lines the way you do? e.g. at RSI 7,3,3? Does the 7 mean 7 periods? What do the 3,3 mean? What do the two 3s do for you in trading? What are they?

Thank you,

Nils

"Hi,
You may try combining RSI with Stochastic (5, 3, 3). Entry should be initiated on Stochastic lines cross and only if RSI has returned from overbought/oversold area. Not all Stochastic crosses are valid for entry though. Use only those that occur below 30 and above 70."

Hi, I have another question about a comment, how come 30 and 70 are used to confirm Stochastic crosses? Instead of 80 and 20? Does this have something to do with the RSI "cross values", which are 70 and 30?

Thank you again! Nils

"just try this with RSI(7) but with GBP/USD and use 5 min chart set +10 TP and you simple will make 100 pip per day wow .:P"

Sounds great! :-) Two questions: What does "7" mean? How do I set for "7"? What is the "+10 TP" setting about?

Thank you,

Nils

Hi Nel,

Carlos wrote:
"...and I added 2 indicators: An Exponential Moving Average 200, close and fractals."

He meant that he added 200 EMA indicator applied to Close and Fractals indicator.
Fractals is a separate indicator. It looks this way:

You can download one for your Metatrader4 platform here: wlxFractals.mq4

Regards,
Edward

Edward, I want to congratulate you for starting this great website.
I have a question.....Carlos Alberto says in one of the comments that he uses "fractal" moving averages.
I am not sure what he means.
Can you explain what it is, how to set it up, and how to use it.?
I know it is a lot to ask.
Thanks.

Nel.

thanx edward

What RSI signals do you use? Cross of the 50 level? Exit from oversold/overbough zone etc?
Is it possible to attach a scree shot, so that we can discuss it? Thank you.

Regards,
Edward

Hey Ed
I am relatively new to forex trading about 4 months in and 9% profit to a practice account. Thing is, i have noticed i am OFTEN late to enter or early to exit so i added RSI to my existing strategy of 7,14,21 MVA(simple moving average)and the 12,26,9 MACD

my strategy was to start watching a chart closely when the MVA looked good and to create an order when the macd told me to but by adding the RSI what order should i look @ the indicators by. i know there prob isn't a definite rule to this but in general what order would you look @ the indicators.

after comparing RSI to macd it seems rsi indicates buy before macd does

should i be adding something instead of RSI?