Two candles before that signal candle, the price has moved above the 14 SMA forming white bullish Heiken Ashi candles. The OsMA was following the price closely and has been above the 0 level for the past two bars.

The Momentum has just crossed above the level, while the RSI has been above the 50 level for a while. As soon as all the rules were met and the current candle closed above the 14 SMA, a long position was opened at 1. Next, the Stop Loss was set just below the last swing low, at 1. The Take Profit of 16 pips was also set, at 1. The vertical line A shows the signal candle.

The first sign to start looking for a short entry was the candle before the formation of the previous bearish red Heiken Ashi candle, followed by the close current candle below the 14 SMA.

The OsMA has gone below the 0 level two candles ago. The Momentum indicator crossed below the level on the previous candle.

The RSI has just crossed under the 50 level. After the close of the current signal candle, a sell order was placed at 1. Immediately after that, a Stop Loss was set at 1. The Take Profit of Not many traders know this strategy and it has been kept secret because of its profitability. Oh yes I remember that group. Terrible to see that happen, hopefully some of the traders were able to continue and find success in your trading. This is just the strategy of trading that I recently stumbled upon as I examined several chart formation and changes in trend both short term and long term.

Your indicator will serve a great purpose of automatically finding those spots of change and making trading a delight that it should be! Just me but like lot of comments, I've been through the indicator jungle.

Settled on a few custom ones via ThinkorSwim. What I like about this EFC indicator is it seems to incorporate candle coloration of a temperature kind.

Follows a logic hot to lukewarm to cool. In heat of the day it can't easy to get twisted around when money on the line so a 'fast glance' 4 color system really helps. Should go well with the many strategies you've offered. I'd like to see you backtest using a smaller stop loss rather than the obvious one. I am much more interested in lower drawdown rather than a high winning percentage.

I prefer to trade daily and 4 hour charts. How well does your indicator perform on these historically? Looking forward to reviewing your new to be released indicator.

You have a good track record of putting out good easy to understand strategies that are profitable. The bar is set high! Love the strategies you guys post this 80,20 strategy is very simple to apply and wit a little patience to wait for the rules to be met i can see this strategy can be very profitable.

Thanks guys for taking time to trace. This looks really good. Just what a newbie needs to improve understanding and results, Thank you for your efforts. If the EFC Indicator's basic premise is to clarify which way to trade and WHEN, I'd see that as being halfway there. Married to a sane breakeven philosophy, it would restore the below average retail trader's faith in ultimately getting to the positive side of the ledger for a change.

Divergence with RSI alone seems like something that I can do with Maybe this keep it simple method is the ONE we've been waiting for. Hello, strategy is built on simplicity, which I personally prefer. Definitely I try tomorrow, looking forward to the novelty will be interesting: D.

You asked what I would like in an indicator? There is no Holy Grail as most already know, but something that would create a solid indication of where to enter and exit a trade, along with it confirming a trending market. Although what I would REALLY like in an indicator is a two armed, two legged one that would mentor me - helping me to be much more confident when I pull the trigger and not dither like my nana, and when to bale on a trade, and to walk with me as I trade for a period to guide me in my approach.

To make me a professional trader and not a wannabe trader. How can I bolt one of these onto my MT4? PS: No disrespect to any nana's out there, but OMG ask mine to make a decision and you need to sit down and make a cup of tea to give her time - a hereditary trait it seems. Cup of tea anyone? Combining reversals with a look back for previous market tensions is good.

One vital feature for an indicator is that used profitably and frequently the price action it is revealing to the user becomes so familiar that you learn to read the market without the indicator. Is there a way to show on the charts the last 50 periods. Even a line that is plotted 50 periods prior and moves along as each period moves forward. Also, has anyone tested as to which timeframe this strategy works best for. I'm a relatively new trader so any thoughts and advice would be greatly appreciated.

Thanks, going on 10 years of losing have been trying to make my own system with the "Color-Coded Bars" - you "beat" me to it - Looking Good! God Bless you richly! Chris Endrizzi endrizzi. chris gmail. com PDF file available: "Basic Distinctions" In God's Two 2 Different Programs!

Looks interesting, and I look forward to learning more on Friday. On the subject of what I look for in a strategy, I look for a system that is "as simple as possible, but no simpler", as some guy with a strange haircut who should have gone to Specsavers reportedly once said!

Seriously, if a strategy is too complicated, it just will not get used. Better to trade a simpler system repeatedly, even if it means the returns are not quite as good as the really complex system. But hey, that's just me! no need to over complicate things. If you like a mess on your charts and understand them then great, but most traders would most likely agree that simple or even "naked" charts price action strategies work best for them.

Hi thanks for all your great strategies, I am now finally starting to make some good profits this last 3 weeks keep up this excellent work. Congratulations Sam! We selected you to receive a free EFC indicator! Contact us at info tradingstrategyguides.

com and we will send you your information! I have never been a RSI fan, prefer stochastic and MACD, but this looks like a nice twist using it with Price Action - will give it a try.

With regards to previous comments about win rates, the Holy Grail is not the win rate but it is the Money Management. I like the clarity of your presentations, keep up the good work. Thanks, great advice Graham! Without properly managing your money, you are doomed to fail at the start.

Nice strategy. I also liked your fractal strat. Thanks for all the great ideas. Whichever one comes first. You need to have both elements high the last 50 candles or low the last 50 candles coupled with divergence in price action with the rsi to meet the rules of the trade. Then obviously make the trade when the price action goes above or below that first identified candle.

So are the RZs based on that? When the bar closes - no more repaint. No signals 3,7 or 10 bars back. Easy to spot simple chart.

If additional filters is needed, then why not let the indicator do the work and only show the good signals? If it works on all timeframes and all markets it is also good. To put it short: I want the indicator to do most of the calculations for me. Keep the comments coming guys! Remember we are giving away access to three of these special indicators on friday! Everyone who has commented so far is entered into the contest! But if you have a system with a strict set of rules you follow that more often then not will produce profitable trades, then you are on the right track!

Its that constant "tweaking" that makes a trader become good to great! png Like this?? We weeded out most of the false "head fakes" so you should be getting accurate reversal trades with our indicator. Well Oteng, if there ever was an indicator that can do that, I tell you human traders would be obsolate or never needed again in trading.

Brokers will cease to be in business and there won't be anyone on the other side to take one's trades. Or still the banks and big institutions with the money will still get their hands on it and put a way premium price on it to make it impossible for retail traders like you and me to get it. It will be a secret weapon and they'll use it to still beat us to the game.

Hello there, Ineresting article! But I still find the strategy somewhat complicated. Well, why count till to 50 bars and what is the logic behind this? Then, why not 20, 15, 30 or so? Did you bactest it or trade it live? Please let me know.

png The indicator will make it much easier for everyone to use the strategy. This line will always stay on your chart 50 candles back so there is not a tedious process of counting candles all the time. To answer your question about why we chose 50, the last 50 candles are still meaningful on your charts on any time frame. THANK YOU VERY MUCH FOR TAKING THE TIME TO EXPLAIN. I AM STILL WAITING FOR THIS INDICATOR YOU PROMISED.

I ALREADY COMMENTED. BY THE WAY, WIL ONE RECEIVE THE PROMISED INDICATOR BY EMAIL OR SOME OTHER MEANS? THANKS PLOK. I am a new trader and at times one is so confused with so maby stratrgies out there. I have however enjoyed reading this strategy you have posted here. Am going to change my settings to see if I understan it. Regards Shads shadtrans gmail. People in nature over think and over complicate things. Trading can be simple but some common sense has to be used.

Price action is king which is proven over and over again. I believe in simple charts and with what I see you guys have developed looks incredible which doesn't repaint which is crucial and this fullfills all the above I just mentioned which is so important in all aspects of trading. A great development from a great company. Our philosophy is to make things more simple then what they need to be. png We see stuff like this from so called "gurus" and shake our heads.

We hope our indicator will make peoples lives easier when searching for reversal trades. It's an interesting strategy. I'd like to know if you have any percentage of success information from backtesting. We have back tested the indicator and it did show us great trade entries and exit points. An indicator which shows the supply and demand zones in all timeframes but especially the longer ones would really be useful.

Four hour, Daily, weekly time frame reversal trades are huge! If only there was an indicator that would show you an accurate way to trade these consistently 🙂. I really think that this indicator will be extremely valuable because in my experience reversals are one of my most profitable trades and I it can be a real pain trying to find it on the charts, this is exactly what I have been looking for. Absolutely Casey!

Thanks for commenting.. Its always a pleasure hearing from a professional trader! In my point of view the most important feature of the indicator is to predict with high percentage of accuracy of the reversal point or zone either over bought or over sold. For this strategy trading strategy, what is the best time frame use to calculate 50 candle for the step. Please i need your advise.

Rosli Hamsan Malaysia. For the strategy, i did use my own strategy by changing the indicator setting. I am using 2 period setting , 5 and maintain the 14 period. I add in the level from 70,60,50,40 and The 5 period mark yellow and 14 mark blue.

The 5 period will show the entry buy or sell when crossing the 14 from bottom or down. Again the level 60 and 40 will indicate to open buy or sell.

But sometimes i can't sure if the trend is up or down. I just add in to my chart the currency strength power indicator and make a decision to enter trade base on the current strength. But your strategy is something additional knowledge to me and many thanks to you for this strategy and can be very useful in my daily trade.

This step-by-step guide will show you an easy way to trade with the MACD indicator. Get the free guide by entering your email now! Please log in again. The login page will open in a new tab.

After logging in you can close it and return to this page. RSI Trading Strategy: The RSI Rule by TradingStrategyGuides Last updated Sep 15, All Strategies , Indicator Strategies , Most Popular comments. Table of Contents hide. OR low depending on the trade. Pramod Bhatia says:. March 4, at am. TradingStrategyGuides says:. January 31, at am. Pankaj Shah says:. January 27, at am. A weakness of the RSI is that sudden, sharp price movements can cause it to spike repeatedly up or down, and, thus, it is prone to giving false signals.

However, if those spikes or falls show a trading confirmation when compared with other signals, it could signal an entry or exit point. It is not uncommon for the price to continue to extend well beyond the point where the RSI first indicates the market as being overbought or oversold. For this reason, a trading strategy using the RSI works best when supplemented with other technical indicators to avoid entering a trade too early.

Here are some steps to implementing an intraday forex trading strategy that employs the RSI and at least one additional confirming indicator:. It is considered good practice to look at initiating a trade looking to profit from a retracement if one of these additional conditions are met:. If the above conditions are met, then consider initiating the trade with a stop-loss order just beyond the recent low or high price, depending on whether the trade is a buy trade or sell trade, respectively.

Technical Analysis Basic Education. Trading Strategies. Technical Analysis. Company News Markets News Cryptocurrency News Personal Finance News Economic News Government News. Your Money. Personal Finance. Your Practice. Popular Courses. RSI and Forex The relative strength index RSI is most commonly used to indicate temporarily overbought or oversold conditions in a market.

Key Takeaways The common levels to pay attention to when trading with the RSI are 70 and

by TradingStrategyGuides Last updated Sep 15, All Strategies , Indicator Strategies , Most Popular comments. The RSI Indicator is one of the best technical indicators for traders. We have developed the Trading Strategy that uses the RSI indicator. It involves price action analysis, which will help you land great trade entries!

This RSI trading strategy is as useful as the RSI 2 trading strategy, which was developed by Larry Connor. However, this strategy strictly trades reversals that occur in the last 50 candles. Read the entire article for all of the RSI trading rules and trading tips.

Understanding the rules of these trading strategies will help you trade this strategy for the highest level of success.

We also have training for the best Gann Fan Trading Strategy. Below, we will discuss the most important things you need to know about trading with the Relative Strength Index RSI indicator. Using the Relative Strength Index, you can identify whether a price trend is overbought or oversold. The RSI Trading Strategy is used as an RSI stock strategy, RSI forex strategy, and an RSI options strategy. We will discuss many things in this article, including RSI vs.

stochastic indicator and why both indicators are excellent to trade with. We will also review the stochastic RSI oscillator trading systems, stochastic RSI setting, five day RSI strategy, Connors RSI strategy, momentum oscillator systems, and binary options strategy that work with the RSI indicator.

RSI is one of the most used trend indicators you will find online. The RSI is a key component of many trend trading strategies. No one else shares how to trade it with step by step instructions. You will only find detailed instructions here. This can also be used with your forex trading strategies if it is your market of choice.

RSI stands for the relative strength index. This will show you an overbought signal. This will also show you when the price is in oversold territory. I recommend using this indicator for the RSI overbought position because it increases your win rate. Before you start trading with our entry signal, we will cover a few key tips to help improve your trade. Also, read our winning news trading strategy , for more information.

First, remember this should incorporate the daily charts to find the best opportunities. Our Strategy should be used with multiple time frames to dial in your entries and make them more accurate.

Second, it is essential to use the RSI signal. You will find the price breaking critical levels for the best possible entries. If you combine this indicator with pivot points and a good candlestick pattern, you will hit trading home runs regularly. You will be shown many images in this article to learn how to sell signals or buy signals. You will use the RSI line, also known as the RSI level, to maximize your effectiveness using this trading method. This article also serves as a beginners guide for everything related to the relative strength index RSI.

We took a lot of time to create this content with details and examples to help you become better traders. This strategy identifies a break of a trend and takes advantage of the movement in the opposite direction. Kind of like our Trend Breaker Strategy. In this article, we will review a simple trading strategy using the RSI indicator.

You are going to benefit from this strategy by learning to trade divergence. Find a low-risk way to sell near the top or buy near the bottom of a trend.

Swing traders attempt to capture medium-term changes in the trend over a period of a few days. And, the RSI indicator is a great additional tool to help us gauge the constant ebb and flow of the price action. However, before we get into that, we need to make sure the RSI indicator is in tune with the medium-term swing trends. The best setting for swing trading is 20 periods. The RSI 20 periods encompass a full month of price action activity, which is just enough to be in tune with the medium-term trends.

The RSI swing trading strategy revolves around trading RSI trendline breakouts. The break of the RSI trendline will be used as a buy and sell signal as follows:. For intraday signals, we need to make the RSI indicator more sensitive to the short-term price action. Otherwise, you might end up with a fast-paced RSI that is not that reliable.

Plot the 4 periods RSI over the 9 periods RSI on the same window and watch for buy and sell crossover signals. You probably never heard you can overlay two RSI oscillators with different periods on the same window. But, this is possible with most trading platforms including TradingView and MetaTrader 4. They also deserve some nuggets. Although crypto traders can easily use the above RSI trading strategies, we have something that is adjusted to the volatility of the cryptocurrency market.

If you want to learn more about it, make sure you click here: Amazing 2-Period RSI Day Trading System. The RSI indicator is one of the most popular indicators used by traders in any market, such as stocks, foreign exchange forex , futures, options, and more. What is the RSI Relative Strength Indicator? This indicator was developed by Welles Wilder around It quickly became one of the most popular oscillator indicators for traders in financial markets.

This momentum indicator can fluctuate between 0 and providing overbought and oversold signals. The formula for this indicator is a bit complex:. I could explain this whole process to you. However, I will spare you the details.

I want to share this with the mathematicians that are reading this and enjoy equations. You can do a quick google search if you would like to learn more. The default settings for this indicator is a smoothing period of We are going to change that setting to 8. Make sure you turn this setting before you jump into this strategy. The reason I prefer eight instead of 14 is because the RSI will be much more responsive.

This is critical when we are looking for overbought or oversold conditions and readings. Also, go into the RSI setting and change the lines in the indicator to 80, You will learn more about this later. This indicator will be the only indicator we use for this strategy.

This is because we have a strict set of rules to follow before entering a trade. And these rules will, without a doubt, validate a reversal for us to open a trade. Below is another strategy on how to apply technical analysis step by step. Before you use this strategy, make the following changes to the RSI indicator:. The Trading strategy can be used for any period. This is because there are reversals of trends in every period. This can be a swing trade, day trade, or a scalping trade.

As long as it follows the rules, it is a valid trade. We also have training for Forex Basket Trading Strategy. In this step, we only need to ensure it is the low or the high of the last 50 candles. This is a USDCHF currency pair and will be a BUY trade.

Once we determine this low or high, then we can move on to the next step. I drew vertical lines on the price chart so you can see the 50 candle low that we identified. If you need to use horizontal lines on your chart to verify that the candle has closed the lowest of the last 50, you can do so. This is not necessary but may be helpful for you to do and see how strong the trend is. When we find a 50 candle low, it needs to be coupled with RSI reading of 20 or lower.

Below we have a reading that hit the 20 line on the RSI and was the low of the last 50 candles. Once we see that we had a low, the last 50 candles, and the RSI is BELOW 20, we can move to the next step.

Remember that this strategy is a reversal strategy. It is going to break the current trend and move the other direction. The second price low must be below the first low. Although, the RSI Trading indicator must provide a higher signal than the first. Remember that divergence can be seen by comparing price action and the movement of an indicator.

If the price is making higher highs, the oscillator should also be making higher highs. If the price is making lower lows, the oscillator should also be making lower lows. If they are not, that means price and the oscillator are diverging from each other.

It is going to break the current trend and move the other direction. Fakeouts are a big problem. The pin bar fxcm exit us market net credit option strategies does show that price could not retain the high it had reached in the earlier part of the session. Keep in mind that most successful strategies that identify breaks of a trend use a 1 to 3 profit vs. So we see that the RSI is higher. Can Deflation Ruin Your Portfolio?

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