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The RSI Trade

  • #121
  • Feb 4, 2009 2:47am Feb 4, 2009 2:47am
Quoting andypips
Hi guys. I'm off to work now (still doing a couple of days each week for a friend plumbing). i'm not that techy so perhaps you could let me know how to post a screen shot on here and i'd be more than happy to do so when I get home tonight.
Definitely post some screen shots. A picture is worth a thousand words.
Just go to Manage Attachments in Thread Options below the message
window. If your files are stored on your hard drive, click on Browse and
locate the folder where your screen shots are stored. Highlight the file
you want to upload and click open. Click Upload and you should be ready
to go. Preview your post with attachments, to make sure the images
upload properly.

Rob
  • #122
  • Edited 4:08am Feb 4, 2009 2:49am | Edited 4:08am
Quoting kareem40
Great post Andy. I will try and please do post some pictures when you get a chance.
As for the LWA (21) is that the average of the price on the RSI chart, or is it the the RSI LWA.
Thanks
K40 - I also use RSI crossovers along the lines andypips describes. Here's a chart I just made with the following RSI comparisons (it's a 233 tick chart, so the bar times are between 4 and 9 minutes right now) - please also note that I have scrunched up the price bars to allow a clearer view of the RSI variations :

Subgraph 1 : andypips RSI 13 with a 21 LWMA (actually, I'm not entirely sure that I have correctly plotted the LWMA, but I think so...); horizontal lines at 45 & 55.

Subgraph 2 : my version of the Fozzy RSI (if you remember the Fozzy thread) - RSI 8 with 8 SMA (the orange dotted line is a 21 SMA). Lines at 30 40 50 60 70.

Subgraph 3 : "your" 21 RSI + trendlines. Lines at 30 & 70.

Subgraph 4 : my personal favourite, Igorad's StepRSI. The dotted red line is an 8 RSI; look how smooth the step lines are. Lines at 32 50 68. NB. I also use the cross of FastStep (cyan) over the 50 Centreline, dependng on the market's "mood". Also note that these are not the default StepRSI settings.

The two vertical yellow lines show the cross of this thread's 21 RSI over a trend line, for comparison purposes. Food for thought : what are the advantages of manually-drawn trend lines (this is to consider, not to suggest, the answer, which of course is personal to each trader) ? I think manually drawing trend lines is a very good discipline... the question is where on the chart window to draw them !

I am experimenting with these RSI variations quite intensely at the moment : it is my intention to "fix" my indicator window by the end of this week (too much fiddling is not good...).

J.

Edit : I'm fairy sure that the LWMA in subgraph 1 is incorrectly plotted (although it looks effective !) - I need to cut and paste the code directly into the RSI indicator : as I am a very slow (non)programmer & am too lazy to start up MT4, I am going to wait for andypips to post his chart. Sorry about that.
Attached Image (click to enlarge)
Click to Enlarge Name: EU RSI comparison.jpg Size: 165 KB
  • #123
  • Feb 4, 2009 7:58am Feb 4, 2009 7:58am
Quoting ChicagoRob
One thing I've noticed, after my RSI trades unfold, is the momentum
of the candles at the breakout. This is a great opportunity to get
your stop in at BE. As I've said before, I'm not interested in hanging
around, watching candles go up and down, hoping they go my way.
I tend to put my stop in tight, and concentrate on the trades with
good momentum.

I want to thank K40 for putting this on the forum. So far, this is the
best system I've used( and I've used many).

I see trades like this all day long. Love the simplicity of this approach.
Thanks for the kind post. I think you have a good idea about the BE, I was thinking about that recently since I have been having lots of BE stop right before the price goes my way.
This set up has been very good for me. It seems to work and it stays simple.
By the way, if you watch in longer time frames such as 60, 1H, 4H, it works the same, you just need bigger stopps. So if you don't have lots of time to watch the markets, just use the 4H and reduce your position.
Trade Garlic
  • #124
  • Feb 4, 2009 8:36am Feb 4, 2009 8:36am
Quoting jtrade
K40 - I also use RSI crossovers along the lines andypips describes. Here's a chart I just made with the following RSI comparisons (it's a 233 tick chart, so the bar times are between 4 and 9 minutes right now) - please also note that I have scrunched up the price bars to allow a clearer view of the RSI variations :

Subgraph 1 : andypips RSI 13 with a 21 LWMA (actually, I'm not entirely sure that I have correctly plotted the LWMA, but I think so...); horizontal lines at 45 & 55.

Subgraph 2 : my version of the Fozzy RSI (if...
Great Post.
Man I thought I knew the RSI. Many great ideas that will probably take weeks to stuy( live).
My goal ( other than making 40 pips a day) is to have no more than two indicators, Fibs and trendlines for the price action. Again please note I also use the manual trend line to keep me in a trade longer, not just to enter. The hardest thing for me in trading is when to pull the trigger when I am making pips. Yesterday I was up 40 pips on a divergence trade. The RSI/Line said stay, yet I did not listen. once I took my exist at 40 the trade continued for 30 more pips.
Again, thanks great ideas, please keep posting.
Kareem
Trade Garlic
  • #125
  • Feb 4, 2009 9:03am Feb 4, 2009 9:03am
Quoting kareem40
My goal ( other than making 40 pips a day) is to have no more than two indicators, Fibs and trendlines for the price action. Again please note I also use the manual trend line to keep me in a trade longer, not just to enter. The hardest thing for me in trading is when to pull the trigger when I am making pips. Yesterday I was up 40 pips on a divergence trade. The RSI/Line said stay, yet I did not listen. once I took my exist at 40 the trade continued for 30 more pips.
Me too on max two indicators : I'll be happy with the 34 ema + RSI (but in what form ).

Two ongoing issues for me are moving my stop to b/e and how big a trailing stop to use (if at all). I am generally over-keen to move to b/e and get stopped out too often as a result. Likewise I don't like to trail more than about 20 pips, which is too tight to get many of the larger moves : I will try using the RSI support trendline as my guide. I also switch between trading in halves and thirds. Halves is simpler, but I generally prefer thirds, taking a small initial partial profit between 6 and 13 pips net, depending on the market, then trailing the third portion (t2 is usually a fixed target based on swing highs and lows). Sometimes I think I should just leave the third portion stop equal to my first partial profit, and be willing see the trade come right back to that point, allowing the possibility to catch the occasional 100+ pip move.

No doubt about it, exits are my biggest challenge...
  • #126
  • Feb 4, 2009 9:19am Feb 4, 2009 9:19am
This is what I do. I move to BE as soon as I am 10 pips in profit. I know it seems fast, but I want to have risk free trade ASAP. I want zero risk as much as I can. I used to use trailing stop, but not anymore. I hold the trade at BE and watch the RSI. I always have a target at 40 ( my daily goal), but will move that target and replace the stop at +40 and hold as long as I can( again based on the RSI). I also still working on exist rules, exists are really much harder to figure out than I intially thought.

When I trade multiple contracts I take half at +10 and move the other half to BE and use my set ups again.
Trade Garlic
  • #127
  • Feb 4, 2009 9:25am Feb 4, 2009 9:25am
Another comparison, this time with the LWMA on the RSI data, which is what I understand andypips is using. Vertical lines mark where these LWMA trades might have triggered (is that right, andypips, or do you only short from above the 55 line and vice versa from the 45 ?)

Edit : I see I missed some crosses...
Attached Image (click to enlarge)
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  • #128
  • Feb 4, 2009 9:33am Feb 4, 2009 9:33am
Quoting jtrade
Another comparison, this time with the LWMA on the RSI data, which is what I understand andypips is using. Vertical lines mark where these LWMA trades might have triggered (is that right, andypips, or do you only short from above the 55 line and vice versa from the 45 ?)

Edit : I see I missed some crosses...
I see where LWMA gives you better entries. Again the exists seem too early, but it Looks good, I will continue to watch it. My problem now is that I have Ninja trader and I cannot get the LWMA on the RSI? I will try support help.
Trade Garlic
  • #129
  • Feb 4, 2009 10:06am Feb 4, 2009 10:06am
Quoting kareem40
I see where LWMA gives you better entries. Again the exists seem too early, but it Looks good, I will continue to watch it. My problem now is that I have Ninja trader and I cannot get the LWMA on the RSI? I will try support help.
I am executing most of my trades via Ninja to Interactive Brokers, but TradeStation still has much more versatile charting. I think the StepRSI may appear soon (I have asked a helpful, but very busy guy on the NT forum to help...). I have found Ninja, both users on the forum and their own support staff, to be very willing to help with indicator prgramming.

But looking at Ninja's RSI, it has a smoothing average already, so it's probably not at all difficult to do what I just did in Tradestation : exchange the standard smoothing average for the weighted version (in TS this involved replacing just one single "reserved word") : I will do this sooner or later if I decide to use it, but as you know the StepRSI is still my "main contender"...

Now, if the EJ would kindly push down to the lows of the day (I'm short from 115.76, stop at 60)...
  • #130
  • Feb 4, 2009 11:51am Feb 4, 2009 11:51am
Quoting jtrade
I am executing most of my trades via Ninja to Interactive Brokers, but TradeStation still has much more versatile charting. I think the StepRSI may appear soon (I have asked a helpful, but very busy guy on the NT forum to help...). I have found Ninja, both users on the forum and their own support staff, to be very willing to help with indicator prgramming.

But looking at Ninja's RSI, it has a smoothing average already, so it's probably not at all difficult to do what I just did in Tradestation : exchange the standard smoothing average for the...
Hi Jtrade,
Thanks for the feedback. Yes I have also found Ninja's support great. I have tried TS and they do have the best charting, but their DOME..???
Please feel free to upload any NT indicators you may find useful and I will do the same on my end.
Good luck with the EJ,
Kareem
Trade Garlic
  • #131
  • Feb 4, 2009 5:15pm Feb 4, 2009 5:15pm
Hi guys. Lots of replies and stuff to try. Sorry no reply but got home from work late and family/something to eat etc. Just thought I would check this before bed(11pm here now). I will get some charts posted tmw as day off at the screens. Just a word on charts - I use broco trader mt4 charts on demo for free. All forex/indices etc that you can imagine and it never needs renewing. I then trade with IG Index. Also have a small ac with alpari and use their mt4 charts when trading with them. I only mention this because you can download from them in minutes and not need to worry about reprogramming indicators etc. I am no good at that and just keep it simple. See you tmw.
Andy.
  • #132
  • Feb 4, 2009 5:29pm Feb 4, 2009 5:29pm
Hi jtrade. just a quick note then i'm off to bed. I guess being in amsterdam you are 1hr in front maybe. Anyway, I tried all sorts of trailing stops, position sizing, scaling in and out. None of it suited my personality. I like to be out of a trade in 2hours max and prefer 10 mins. I found that a target of 20 per day which may come in 2 x 10 was once my ideal. Then as the majors have started going nuts each day I got greedier and moved to b/even to get 80 or whatever. next thing stopped out for nothing having seen 30ish etc. Looking back 12 months if I had stuck to my plan of 20 and compounded I would be minted now instead of still working part time to achieve full time trading someday soon. I think I was convinced I would get where I was heading in 2 months and failed. I am now much more disciplined. I have spent a minimum of 6-7 hours a day on average 7 days a week learning this skill over nearly three years now and realise that sticking to one template and massive money management is king. I have a compounding spreadsheet I can post if anyones interested and 20 pips a day are all thats needed.
Andy
  • #133
  • Feb 5, 2009 2:30am Feb 5, 2009 2:30am
Quoting andypips
Hi jtrade. just a quick note then i'm off to bed. I guess being in amsterdam you are 1hr in front maybe. Anyway, I tried all sorts of trailing stops, position sizing, scaling in and out. None of it suited my personality. I like to be out of a trade in 2hours max and prefer 10 mins. I found that a target of 20 per day which may come in 2 x 10 was once my ideal. Then as the majors have started going nuts each day I got greedier and moved to b/even to get 80 or whatever. next thing stopped out for nothing having seen 30ish etc. Looking back 12 months...
Good post, Andy. I'm still leaning towards leaving on part of every trade to pick up the occasional big winner, but instead of thirds, maybe I'll switch to 40:40:20 ...

You're completely right about averaging 20 pips per day - absolutely not as easy as it sounds - with full size lots, the account starts to really accelerate...
  • #134
  • Feb 5, 2009 2:38am Feb 5, 2009 2:38am
btw, Andy - you mentioned you do not enter positions on the basis of RSI / LWMA crosses between the 45 & 55 lines : do you only take short above the 55 and longs below the 45 ?
  • #135
  • Feb 5, 2009 3:14am Feb 5, 2009 3:14am
Hi Jtrade. If the rsi has crossed up the lwma below 45 then I would consider a long if the price action suggested it and vice versa. I would however be ready to move to be or stop for a loss if the rsi stalled at or in the 45/55 zone. Taking this as an example if the rsi along with price moving up has crossed the average but stops at 45 then as long as price holds up while the rsi pulls back slightly I hold the trade waiting for the next momentum push up through 45 then wait for 50(not so much) and 55 to break. If I have my points already then I'm out or move to +20 and see if it breaks the 55. If I suspect that the trade will struggle in this zone I may only set my tp at 10. I sometimes use fib levels and pivot points to confirm the chances of 45/55 breakthroughs.
I see you want to only use two indis, but I personally think it's either none at all and price action only or 4 or 5 indis all confirming each other. Later today i'll post a picy and you will see my charts(hopefully). I don't find them too busy. Off to play with the kids now. Snow 6inches deep and schools shut. we don't get this much in sw england, so off sledging.
Andy
  • #136
  • Feb 5, 2009 4:30am Feb 5, 2009 4:30am
Quoting andypips
I see you want to only use two indis, but I personally think it's either none at all and price action only or 4 or 5 indis all confirming each other.
Thanks for the response, Andy, quite snowy here too.

I have made my "indicator decision" : main indicator is StepRSI only, which has quite some subtleties, as it includes RSI, Fast & Slow Steps and trend lines can be drawn on it, plus horizontal levels of course... I am also using Fib retracement based on the high and low of the previous day, but I am less keen on pivots, preferring to draw obvious trend lines and support / resistance on the charts manually. Still have the 34 ema, so that'll be enough spaghetti for me... and I have reset my profit targets at 40:40:20 %.

I also have separate, naked 1 min line charts of both pairs I trade (from shakesfx journal).

Have a great sledge with the kids !
  • #137
  • Feb 5, 2009 6:25am Feb 5, 2009 6:25am
Hi there. Chicago rob. thanks for the advice. I will now attempt to try and upload a chart from this morning. If it works ok then i'll post the info about it afterwards. Kareem, sorry to try this out here but am keen to show some pics.
Attached Image (click to enlarge)
Click to Enlarge Name: mt4 screenshot.gif Size: 45 KB
  • #138
  • Feb 5, 2009 7:06am Feb 5, 2009 7:06am
Nice posts. Very interesting ideas. Your chart looks good. I assume the Red lines are either entry or re-entry, correct?
Trade Garlic
  • #139
  • Feb 5, 2009 7:26am Feb 5, 2009 7:26am
Well thanks Rob. that worked fine.
The chart I posted may help explain 45/55 more. The 1st vertical red line shows down through lwma and tests the 55 line and the 21 ema(main chart). The others are 10ema-aqua,21ema -blue and 50ema-yellow. The 2nd red line shows where the 55 line is broken.Down slope on lwma. Also cci sets up nicely to enter short. See how the rsi is kept down by first the 55 level, then the lwma until line 3. Now here is no entry as the rsi is close to the 45 line but trapped between. Sideways price action under the 10ema. Line 4 is a possible entry for a long but price action from earlier this morning shows heavy res coming up. Also gbp int rate.I didn't trade these as I was sledging. I did trade 8.04 to 8.18 short for 23 pips and 11.25 to 12.11 long for 27 pips, gmt times.
Jtrade, could you upload the igorad step rsi please, I would like to try that.
Thanks
Andy
  • #140
  • Feb 5, 2009 7:31am Feb 5, 2009 7:31am
Hi Kareem. I have explained some more just now. I will post another chart with my earlier entries that I took in a short while. I trade mainly 15 and 5 mins but some days it alll comes together on 1 minute. I find these settings that I use work on all time frames. I use the woodies cci as you can see on the charts. That is second to the rsi but i can remove it for any posts if you wish to keep the thread on rsi only.
Andy
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