RSI+Breakout (Simple Daily System) | Forex Factory

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RSI+Breakout (Simple Daily System)

  • #1
  • First Post: Oct 12, 2007 5:03am Oct 12, 2007 5:03am
I thought I am just going to post this here quickly to get some feedback. I was thinking about a breakout/reversal system backed by RSI.

So when RSI is above 50 and the price goes higher than the last 4 days. Buy at the breakout.
Same for the short.
My calculations shows that this bare bons system without any optimization and money management is profitable.

Any thoughts?

Regards
BR
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  • #2
  • Oct 12, 2007 8:45am Oct 12, 2007 8:45am
72 views and no repplies. Come on. I will post then some backtest results later the day.
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  • #3
  • Oct 12, 2007 8:52am Oct 12, 2007 8:52am
It seems my attempt for the "which threads dies faster" has a success.

Just kidding. The setup is very simple and has huge potential. +2000 pips over 7 years without any kind of money management and optimization. Now the highest point in the bull run ups was over 2300 pips which means 1 position over 7 years could bring 1 pip a day on average but with an implied position/money management that could be well above 4-10 pips a day on average which is not too bad considering that the goal is to design a long term easy to follow system.
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  • #4
  • Oct 12, 2007 9:29am Oct 12, 2007 9:29am
Hi BR,
looks very good to me. If you use a 21 RSI (break above 50 level) and 5 and 12 ma's to show the breakout. Waddya got?
  • #5
  • Oct 12, 2007 9:58am Oct 12, 2007 9:58am
Quoting Acko
Hi BR,
looks very good to me. If you use a 21 RSI (break above 50 level) and 5 and 12 ma's to show the breakout. Waddya got?
Well I make some calc to verify this. But prolly I misstyped something. The price breokout is an important point. That is the entry. That is the RSI at the previous bar went from 49 to above 50 and the current price breaks above the highest high of the previous 4 bars (days.) Check it on your chart.
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  • #6
  • Oct 12, 2007 10:44am Oct 12, 2007 10:44am
Acko -

What do you mean by using MAs to "show the breakout"? Price is either within or beyond the range of the last four days. Thanks in advance.


Bullrock -

What RSI period are you using?
What are your exits?
  • #7
  • Oct 12, 2007 10:47am Oct 12, 2007 10:47am
Hi Megadave,
no, I suppose I was being a tad flippant. It just reminds me of the great Bago method is all. Sorry for any......
Dave
  • #8
  • Oct 12, 2007 10:52am Oct 12, 2007 10:52am
Quoting Acko
Hi Megadave,
no, I suppose I was being a tad flippant. It just reminds me of the great Bago method is all. Sorry for any......
Dave
No worries, Acko! Just wanted to know what the MAs can show

I'm eyeballing a chart right now with this RSI entry set-up. This type of system should be easy enough to program and test its validity. Any programmers want to lend a quick hand?
  • #9
  • Oct 12, 2007 11:03am Oct 12, 2007 11:03am
Ok, I'm at work right now so I don't have the luxury of having FOREX charts. however, I did pull this up on S&P500 and DX.

Instead of buying the break of the last four days on an RSI 50 cross, it looks like you're better off to wait a day after a cross. Like this:

Possible long trade scenario

Day 1: Market closes higher, RSI started Day 1 under 50, prints over 50 by EOD

Day 2: Wait.

Day 3: Verify that RSI is still +50, set entry at break of the high of Day 1 or Day 2, whichever is greater.
  • #10
  • Oct 12, 2007 11:33am Oct 12, 2007 11:33am
Quoting megadave5000
Ok, I'm at work right now so I don't have the luxury of having FOREX charts. however, I did pull this up on S&P500 and DX.

Instead of buying the break of the last four days on an RSI 50 cross, it looks like you're better off to wait a day after a cross. Like this:

Possible long trade scenario

Day 1: Market closes higher, RSI started Day 1 under 50, prints over 50 by EOD

Day 2: Wait.

Day 3: Verify that RSI is still +50, set entry at break of the high of Day 1 or Day 2, whichever is greater.
Thank you for the contribution.
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  • #11
  • Oct 12, 2007 11:59am Oct 12, 2007 11:59am
Quoting megadave5000
Ok, I'm at work right now so I don't have the luxury of having FOREX charts. however, I did pull this up on S&P500 and DX.

Instead of buying the break of the last four days on an RSI 50 cross, it looks like you're better off to wait a day after a cross. Like this:

Possible long trade scenario

Day 1: Market closes higher, RSI started Day 1 under 50, prints over 50 by EOD

Day 2: Wait.

Day 3: Verify that RSI is still +50, set entry at break of the high of Day 1 or Day 2, whichever is greater.
Just one thing. FX and SP are completely different markets in nature. It is not possible to apply the same philosophy. Starting with little thmgs that FX is a 24 hour market and that the currencies tend to trend in down and up directions.
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  • #12
  • Oct 12, 2007 12:22pm Oct 12, 2007 12:22pm
HI, BR,
I have been using 14 RSI for a long time, but am looking at 21 RSI. It is interesting that you are looking at this. I have the same thought of the use of the RSI, but I want to spend some time developing my strategy I want to use. I will let you know what I come up with. I am leaning to not using any other indicator, but only use price and S&R and TL.
DCB
  • #13
  • Oct 12, 2007 12:36pm Oct 12, 2007 12:36pm
Quoting bullrock
Just one thing. FX and SP are completely different markets in nature. It is not possible to apply the same philosophy.
It is possible to apply the same philosophy. I do it all the time. Markets are markets. It is all about probability and psychology. To back this up, I will steer you to the James16 thread and watch as he trades not only FX but oil and indexes using the same setups across all three asset classes.

As a speculator, you really aren't trading anything except "risk" anyway, no matter what you're trading, from soybeans to options to currencies.

Quoting bullrock
Starting with little thmgs that FX is a 24 hour market and that the currencies tend to trend in down and up directions.
S&P500 is also a 24-hr market, the volume outside of the normal trading day is extremely light, however. But you can trade SPX at 3:00am central US time if you want.

Other markets besides currencies trend up and down. In fact, they all do. What other way could they move? Out and in?

Look, I don't want to argue. I'll just say that this discussion has spawned a really neat daily entry system on the charts I'm looking at. For that I'm thankful. I will have more to say when I can look at some FX charts. Take care
  • #14
  • Last Post: Mar 18, 2009 10:49am Mar 18, 2009 10:49am
can u pruf it with a given chart
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