The RSI Trade

Please note on strong trending days, divergence do not work. Keep a tight stop even with divergence, in case the trend continue.
My stops are always at 20 pips.
Thanks for the post.
Kareem

Hi, Kareem ,

Hope all's well in sunny FL.

Here's my current Ninja chart for you to consider - very simple, the result of a LOT of thought and trading... note the RSI settings :nerd:.

NB. I also need the trades to simultaneously trigger on a 233 tick TradeStation chart, which has Klinger volume (trying to get this coded for Ninja).

J.

using ADX when strong trending days. you can avoid the wrong trade

Hi J,
How do you like MTP. Seems to work well in their presentation. How is your trading. Not much here, still travelling and watching. Glad to hear that you still have the RSI on. It seems to work well. I will try to post again next week, but it has been busy.
Take care

Hi, k,

Here's my current Tradestation chart - regular RSI now replaced with QQE (which is based on RSI) : good for trade hold. My Ninja chart still with RSI as per a few posts up.

Hope you're doing well - I am SO BORED ("I'm Chairman of the Board..."), I've even drawn a fib retracement .

Daily target in the bag, 1 contract still running (Mrs jtrade says I should stop trading for the day once my $500 is banked, but really, I should be averaging $1k by now...).

I think I will take Lady for a play in the garden (new Goldendoodle puppy - the new love of my life - pic duly attached)..



J.

Edit : I forgot to add that my new goal is to make only 1 daytrade a day, timed around - and usually ahead of and into - the various London ORB trades.
I am adding longer term methods - starting lots of backktesting with a new Tradestation add-on widget that tests multiple instruments in multiple timeframes via the new TS GO.

Hi J
Nice trade to start the day with. The qqe is nice , do you use the 5 period or is that 34 on the top left i see.
Hope all is well and i see you posting on the eur/gbp t/magic hysteria thread. I have been following it but i think it may start to get out of hand. Paulus has pulled back from moderating it today.
I'm still using t/lines on an rsi and using the double cci with sma. thats it along the bottom of my charts these days. Kareem is still busy with work i understand. Are you only trading the eu futures and dax?
Andy

...or in my case a nice trade to finish the day with .

Here are the TS QQE inputs I'm using : I couldn't get the QQE set up the way I like it in MT4, although I do have it fine in Ninja.

Good to hear from you, btw, andy - I was wondering how you've been.

K : sorry, didn't answer your question about MTP. I use the MTP Decision Points for targets and support / resistance (in Ninja), althugh I know many traders who use MTP successfully as their base trading method. HOWEVER, I am about to ditch almost everything I've learned about targets etc and - as we discussed with andy awhile back - just target 20 pips "whatever the weather". The trade I posted above just closed with the three contracts at +8, +20, +14, so 42 pips x $12.50 = about $510 after commissions, but if I just took off +20 x 3, then it would have been $735 (it's about $5 / contract rt commission). A bit more stress not grabbing my 8 tick "fix", but much less after that.

Making big 100 pip+ trades is great, but I want to pay the bills. 100 pips / week x 5 lots is $20k / month. I think that's a realistic target, but in this area "my perception is not yet my reality".

Time for a cappuccino.

I have TrendMagic and The London Progressive templates up in MT4 : I am interested in my setups that trade into their entries. I don't blame Paulus for pulling back a bit (he shares so many interesting ideas) : I think there is a direct correlation between the amount of posts I make and my trading well, ie. the less posting the better, really...

I want to experiment with iGoR's SuperMM (over on Forex TSD under his Zorro thread), so not trading the DAX at the moment and about to trade cash fx as I need to reduce lot size as it gets fairly hysterical : it can go from 1 mini to several full size quite fast. Can't say too much as (a) I don't fully understand it and (b) there is a commercial element and we're not supposed to mention such things over here (no commerical element for me personally, I hasten to add) ! If anything comes of it, I will definitely let you know.

Hi J.
Thanks for the answers.
What do you call an intelligent blonde?






.....A Golden Retreiver.

Glad to see you making the pips. I am still pushing forward with the 20 pips thing but keep trying to increase lot size too quickly. Get bored and overtrade. I am learning quickly though. As part of the process I report to the wife each evening and the swift quicking I get on a losing day readjusts those targets and percentages very quickly. I have some days when I clear 100 but others when i'm fighting all day to break even. It's not worth the grey hairs. I do find that my first two trades each day are the best. It doesn't seem to matter what time of day. I know this means I should walk away and come back 4 hours later but I still think this makes me lazy. I will overcome this i'm sure.
Don't tinker too much though with your system , it seems you have it nailed. I find that as it starts to become boring I look for something new and exciting. The reality is that boring usually means profitable and safe. I don't do boring and safe but know I have to.
Speak soon
Andy

put Wailliams' Percent R over RSI all default setting, you can avoid the bad trade. (it short of form MACD)

The RSI really works, I use the RSI 70/30 Strategy. I took my Live account from $900 to $16,000 . . . in one week , I was 49 out of 53 trades using the RSI 70/30 , and I was only trading GBP/USD, EUR/USD, and the AUD/USD. I would trade all three currencys at the same time most of the time on the 15min chart, my target or max pip profit is usaully about 20 to 30 pips, unless i just move my stoploss up then my earnings have the potential to be alot more. It is really simple too use!!!

Show us a chart, please, Maal.

Hello
It is nice to see the thread alive again. I glad to hear that you guys are still here and still trading well. I am back to trading again. Since I little rusty, I am trading small. It also seems as markets are very choppy for the last couple of weeks. I am still using the RSI, but I made some changes ( and added some new ones) to my trading set ups. We really should all have different set ups/indicators for different types of markets. I truly believe now that there is no one set up/indicator that can make us pips ( or keep us profitable) every day. I strong trending days, the RSI can kill your account. I am using additional set ups and I will post some charts next week. So far I am doing well. I have not lost any money in the past two weeks. I am also very strict with my risk management. I will not risk more than 2% on any trade, period.
I am also watching the euro futures (but trading spot); I like it better than spot since I can see the volume as well. I like to trade spot since I can drop down to 25k lot. This can be useful when I am having bad weeks. With futures you are stuck with the same size no matter what. I tried the Micro mini, but the spread/fill in those instruments are crazy. Sometimes I think someone is actually watching trade those things are laughing out loud.
Jtrade I like your charts and dog. I do use Fibs a lot to see if we have a retracement or trend change. I agree sometimes less is more in trading, but I still have a problem of taking my profits too fast, so it forces me to trade more. $500 per day is good, J . Like your wife I say take it and go swimming or golfing. Andy I did watch your set up and it seems to work well. Post some charts if you made any changes. Like you Andy I tend to start the trading day with a couple of good ones ( trades!) then do give it back to a better trader.
I will continue to stay in touch in this thread.
Kareem

Thank you for your post, please do post a chart if you can.
Kareem

Thanks for the post.
Yes a chart would be great." A chart is worth a 1000 pip."
Kareem

Hi
This was my first post.
It was quite long, during writing it I lost the curser? and could not continue - is there some sort of time limit or post length restriction.
Thank you
Peter

Hi Peter,
No limit on my end. Sometimes FF has some posting problems. Please try again later.
Thanks
Kareem

I too have used RSI to exit. This is an interesting twist.

Hi Kareem and friends,
Great thread, thank you.

I am a bit of an imposter here as I only trade stocks. I trade my super fund which places restrictions on what I can trade.

However, the RSI is the basis of my trading and has been for a long time.

I am 70+ years old and trade on the daily charts (using multiple timeframes). I allocate half an hour max. to trading each day, sometimes just 5 mins to update my stops.

RSI Construction
If you plug values into the RSI formula, you will find that it is more responsive around the 50 level, as the RSI values move towards 0 and 100 - it becomes less responsive i.e. it takes a larger price move to change the RSI by a set amount.

RSI Features
It is a leading indicator, does not lag price
It can be used successfully as a stand alone indicator in any market condition
It offers reliable support/resistance levels
It can be used for line studies (including trendlines)
It can be used to highlight abnormal conditions (extremes)
It can be used to show regular and hidden divergence

Special feature
It offers low risk type tradesi.e. the distance between the initial stop and entry point is small, therefore it provides the possibility of acheiving a good risk/reward
I believe that working on keeping my losses to a minimum was my ah ha moment in trading

RSI Support/Resistance levels (they are more zones as opposed to actual levels)
The RSI offers very good S/R levels at 20, 40, 60, and 80
-Price is in an uptrend when it is bouncing between/of the 40/80 levels, when it goes above 80, this is an extreme, see below
-Price is in a downtrend when it is bouncing between/of 20/60 levels, when it goes below 20 , this is an extreme - see below
- Price is not trending (range bound) when it is bouncing between/of the 40/60 levels
Trading signals:
Can use standard S/R tactics or trend trade
- Take long trade when RSI passes up thro say the 60/65 zone (new trend following congestion)
- Take long trade when RSI passes up thro say 35/40 zone (new trend following a large correction, or down trend)
- Take short trade when RSI passes down thro 40/35 zone (new trend following congestion)
- Take short trade when RSI passes down thro 65/60 zone

My Favourite signals:
1 RSI extremes
- If the RSI goes above 80, then it must be a strong move (see construction)
- This is an abnormal condition and is not sustainable, it ultimately must fall!
- If I use it as an entry signal - then I enter as it falls below 80
- If I am already in the trade when it goes above 80, I place a stop below the associated price bar, and keep doing this with each subsequent bar until I am stopped out (no point in giving back a windfall profit)

2 RSI / Price divergence
The RSI gives good divergence signals both regular and hidden
Regular divergence - sign of weakness, expect a reversal of sorts
Hidden divergence - sign of strength , expect trend continuation
- Long signal: Price lower low/ RSI higher low (regular divergence)
- Long signal: Price higher low/ RSI lower low (hidden divergence)
- Short signal: Price higher high/RSI lower high (regular divergence)
- Short signal: Price lower high/ RSI higher high (hidden divergence)
If we are in a trade and a regular divergence occurs - we should at a minimum tighten our stop
Divergence may occur over more than two swing highs/lows, so price action should be used to confirm a trade
These are high probability trades
3. RSI line studies including trendline and other standard patterns

Exits
Other than the extremes mentioned above -
You may consider using..... as the RSI approaches an RSI S/R level , tighten your stops to just below the associated price bar (for long trades - opposite for shorts) or trendline breach

Thats about all that I can think about, at the present moment, in the ramblings above I hope there is something somewhere worth considering

Please do not ask me to post any charts - too hard and time is precious - too many more important things to do (can't teach an old dog new tricks)

Before committing real money with any of the above , please check to make sure that it works for you.

Kareen, I hope I have not mis used your thread. I very rarely post - too time consuming
Thats my contribution for another year

Don't worry - be happy
Be profitable
Peter

ps I use RSI (9)

Hi Peter,
Thank you for a great post. Much to read and study in what you have posted. I have read some of what you posted in different articles, but not in this much detail, and not at the same place. I will try and watch for your set ups and I hope we can have you post some more in future. You seem to know the RSI very well. I am glad you found us and I hope to hear from you again soon. From what I found it seems (to me) that the RSI does not work well on anything less than 15M time frame. What do you think?
Thanks
Kareem