The RSI Trade

Hi,

If you were trading an intraday stratedgy on a 15M chart, what RSI period would you recommend. A 14 or 21 ?

Thanks for your ideas!... T-Wolf

Nice thread! Has anybody tried with 1 min charts? What are the settings for Step RSI?

Thanks

Chamane

I found the 21 to work all on all time frame charts. I looked the 15M and founded it to work well, but you do need bigger stopps ( of course you will get bigger rewards) when you do that.
Thanks

I did but I got too many false signals. I would not trust the divergence signal on the RSI. The same happened in the 3M.
As for the RSI I just have the 21 period rsi.
Thanks
Kareem

So I suppose it's good for 5 min up TF.

I tried StepRSI (8,5,10) and it seems to be following price quite good on 5 min.

chamane

Please post a picture when you can. I am still using the plain RSI and draw lines manually.
Thanks
Kareem

i like this method.

it is similar to one i used to use a while back by inserting a GANN FAN on the HIGHS & LOWS of the RSI.

this thread is good. pity i cannot vote on it.

nice work.

Thank you for the post. I am still using it. I just added the adx to tell when not to trade at all.
Kareem

Hi, K, good to see you posting.

Here's my current setup : I semi-duplicated andypips' RSI Colored indicator usage within TradeStation and shrunk my Klinger ATR indicator to just a red green line + the Better Volume.

I'm not drawring trendlines on the RSI at present, much as I like them : I just want the RSI to be above or below 50. I like divergence trades and also manually draw pivots through congestion areas ; had my 8 yr old not walked into my office at the time, I would have taken the red arrow trade shown : a "divergenceRSI<50throughpivot" entry.

As you know I've only just returned from an unexpected trip to Germany, so my first trade for 2 weeks was the one shown earlier. A small trade, but still $175 in the bank...



J.

Welcome back J.
Thanks for the post. Very interesting set up. Seems to work very well. It seems that the paint bar works very well also. I still using the RSI and drawing lines, but I have it with other indicators as well. I am also setting up for the FX Micro contracts. Once the Volume picks up, will move to the CME micro. I am really getting tired of the broker games.
Again good to have you back.
Kareem

1st time posting here , found you after a RSI search this morning , have
read all , set up a chart and will try some trades later tonight . I` m on
west coast . Curious what your other indi`s are now ? Guess I favor a simple
price action approach but always open to learn . Thanks for your thread ,
really hope it keeps going . BTW wheres andy ? his charts were great .
Will post one of mine as soon as I have a trade to show .
cheers - glass

Are you entering on the break or close of the candle after the break?

Thanks for the kind words, K. The paint bar is very simple and yet I find it more useful than the popuar HA bars : all it does is paint the bars above / below the ema (I am using 34ema, thanks Islander). I'm going to try to post a comparison here, made by the guy who coded it (a truly brilliant programmer and trader - a rare combination imho - hope he won't mind me posting his chart).... I am also going to check out a newer version which adds a neutral color.

PS. I have modified my chart AGAIN this morning... it's that pesky (ie. excellent) VSA thread in the Discussion section that's given me a new case of "volume indicatoritis" to which I am always vulnerable...

I have added ( and took out) about 8 indicators to get better trades. So, far I do use the 20 EMA and ADX to work best. And what I mean by that is, they tell me when not to trade any RSI set up. I will post some more pics over the weekend. I am still trading part time and work has been busy. Andy is still around and trading, and yes he does have some great set ups. He is a good trader.
Thanks for your post.

Kareem

I like candle close, and always after the break.
Thanks for your post.

Hi J,
I am starting to use the 20 ema more and more. It seems to show support and does trade well with the 21 RSI trendline. I assume this Paint bar is a Tradestation indicator, correct?
Be careful trading tomorrow! Should be wild.
Kareem

Latest chart here - getting simpler and I might even try running without the RSI , ie. Klinger + ATR indicator only, then focus on PA & volume. But I should go to bed and have a good night's sleep before removing my trusty RSI ...

I downloaded the new TradeStation (yes, these charts are TS) 8.5 today : lots of new charts to experiment with : range bars, momentum bars, Kase, Kagi, Renko.... but my guess is that I will stick with tick and volume bars for the time being. It might have been Kierkegaard who said "Too much choice leads to the madhouse"...

Yes J, its like a 10-year-old in a toy store. I love TS's charting. They are the best. The Klinger is RSI based, correct?

No, see below a piece by Klinger himself, but this was in turn modified some years ago by an excellent contributor to the TradeStation forum (only accessible to TS users) called Trend39. I use Trend39's version.

Published by Stephen Klinger:
(TS does have a Volume Oscillator in its library.)
The Dec 1997 issue of Tech Analysis of Stocks and Commodities published the Klinger Oscillator in the December Traders’ Tips. This is the cut and paste explanation:
In "Identifying trends with volume analysis" in this issue, Stephen Klinger gives a new approach for using volume. The TradeStation Traders' Tip this month is based on the volume oscillator (KVO) presented in the article. For TradeStation and SuperCharts, we'll call the indicator Volume Osc (not the one that we have in the TS library). This indicator can plot both the short-term and long-term versions of the oscillator.
The indicator uses a total of four inputs: FastX determines the length of the faster (shorter) exponential moving average of the volume force; SlowX determines the length of the slower (longer) exponential moving average of the volume force; Trigger determines the length of the exponential moving average used to smooth the KVO line; and Smooth determines the amount of smoothing of the KVO and trigger lines using a summation of the values. The Smooth input allows for the generation of smoothed plot lines for longer-term analysis. If the Smooth input is set to 1 or zero, no smoothing will be in effect.
The process of developing this indicator begins with the creation of two functions, Vforce and KVO. These two functions basically provide supporting calculations, which will allow the oscillator values to be easily referenced from other custom studies. The two functions should be created in the order presented below, using their assigned names.


The Klinger Oscillator is a construct which is intended to illustrate when price changes are confirmed by volume. The price is expected to follow the Klinger Oscillator if there is a divergence between the price and the indicator.
The Klinger Oscillator computation involves constructing a parameter called the 'Volume Force' which combines close, high, low, and volume into a single indicator. The Klinger Oscillator is then created as a fast exponential moving average of the Volume Force minus a slow exponential moving average of the Volume Force. The KO takes two input parameters: the periods for the fast and slow moving averages, respectively.
See a picture of Bearish Divergence at this site:
http://www.stockworm.com/help/manual/klinger-oscillator.html

This is an explanation from Prohet.net:
http://www.prophet.net/learn/taglossary.jsp?index=K

They show the Klinger Oscillator and they have also changed it to a Klinger Histogram which essentially levels the reference line of the Klinger Volume Oscillator to zero.
The KO is derived from three types of data: the high-low price range, volume, and accumulation/distribution. Price range is a measure of movement and the force behind that movement is volume. Accumulation is when the sum of today's [high]+[low]+[close] is greater than yesterday's. Distribution is when today's sum is less than the yesterday's. When the sums are equal, the existing trend is maintained.
Volume produces continuous intraday changes in price as it reflects buying and selling pressure. The KO quantifies this difference between the number of shares being accumulated and distributed each day as "volume force." A rising volume force should accompany an uptrend. It should then gradually contract over time during the latter stages of the uptrend and the early stages of the following downtrend. This should be followed by a rising volume force reflecting some accumulation before a bottom develops.
By converting the volume force into an oscillator representing the difference between a 34-period and 55-period exponential moving average with a 13-period trigger, the force of volume into and out of a security can be tracked. Comparing this force to price action can help identify divergences at tops and bottoms.
The KO works well for timing trades in the direction of the trend but can be less effective when going against a trend. However, when the KO diverges from the underlying price action, the observed trend may be losing momentum and nearing its completion.
Klinger notes the most important signal occurs when the KO diverges with the underlying price action, especially on new highs or new lows in overbought/oversold territory. A stock achieving a new high or low for a cycle with the KO failing to confirm this shows a trend that may be losing momentum and is nearing completion.
If the price is in an uptrend (above an 89-day exponential moving average), buy when the KO drops to unusually low levels below zero, turns up, and crosses its trigger line. If the price is in a downtrend (i.e., below an 89-day exponential moving average), sell when the KO rises to unusually high levels above zero, turns down, and crosses its trigger line.

Thanks J.