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Attachments: The RSI Trade
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The RSI Trade

  • #521
  • Aug 26, 2009 4:23pm Aug 26, 2009 4:23pm
Quoting Qqe
Really nice to jump from M5 to H4...Like climbing with no tools...
Hi Qqe,
I cannot day trade currently. My job requirement has changed and travel makes it very hard to watch/trade the 5M chart. The concept is still the same, the 4H seems to follow the same set ups so far. I just have to get used to trading smaller and using larger stops/targets.
Also 4H seems to less stressful so far.
Kareem
Trade Garlic
  • #522
  • Aug 28, 2009 4:59am Aug 28, 2009 4:59am
Trendline re-tested and a nice divergence usdcad this morning
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  • #523
  • Aug 28, 2009 8:54am Aug 28, 2009 8:54am
another divergence , live trade
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  • #524
  • Aug 29, 2009 5:16am Aug 29, 2009 5:16am
Hi Gavril,
Hope Kareem does not mind a slight highjack.

Ref #523
I notice that you use Bollinger Bands - they can tell you when a move is over. You have confirmation of the end of a breakout move from a narrow Bollinger Band throat, when the Band nearest to the price flattens or turns.
Also the trend is weakening when the price breaks outside the bands and retraces to make another low inside the bands

So in your above example - the Bollinger Bands have confirmed that the down move is over.

Isn't hindsight wonderful - but anyway something which may prove useful in future?

Have a nice weekend
Peter http://www.forexfactory.com/images/icons/icon7.gif
  • #525
  • Aug 29, 2009 1:05pm Aug 29, 2009 1:05pm
Quoting lizpet
Hi Gavril,
Hope Kareem does not mind a slight highjack.

Ref #523
I notice that you use Bollinger Bands - they can tell you when a move is over. You have confirmation of the end of a breakout move from a narrow Bollinger Band throat, when the Band nearest to the price flattens or turns.
Also the trend is weakening when the price breaks outside the bands and retraces to make another low inside the bands

So in your above example - the Bollinger Bands have confirmed that the down move is over.

Isn't hindsight wonderful - but anyway something which...

Hi mister ! Your posts here are always very usefull
  • #526
  • Edited Aug 30, 2009 3:50am Aug 29, 2009 1:14pm | Edited Aug 30, 2009 3:50am
I trade with both RSI and Stoch. I think, it is best for me even though I have searched many ways of trading..

When Stoch's signal is same with RSI trendline signal, i trade with no doubt. Divergence is my second choice.

At least 150 pips in three trades as an example...
.
http://img195.imageshack.us/img195/8458/35059645.th.gif
  • #527
  • Aug 29, 2009 2:36pm Aug 29, 2009 2:36pm
Hey man could you clarify what you mean by stoch applying rsi?
  • #528
  • Aug 29, 2009 10:41pm Aug 29, 2009 10:41pm
Hi Qqe,
(I trade daily charts)
I used to use the stoch but found it very "noisy' - to overcome this I set it to 45 periods so that it just picked out the main moves.

Have you tried the RSI/CCI combination?
RSI operates between 0 - 100
whereas the CCI is unbounded, but it tends to have limits to which it will travel in an uptrend and limits it will travel to in a downtrend (just put the crosshairs of your mouse across the historical peaks and troughs to get each pair/stocks limits. (obviously it does not work every time but it is a very good guide)

Application
When using the RSI S/R lines for entries and exits, the CCI can be used to help filter out possible false entries and help with exits
E.G. If the RSI is approaching 80 and the CCI is at/near its "peak level", then there is a good chance that the RSI will be rejected at the 80 level
and say the RSI is breaking out above the 60/65 level and the CCI is at / near its "peak level", the odds are that the breakout will not amount to much (if anything)
etc, etc, etc.

and the CCI is pretty sensitive to divergencies, between the RSI and the CCI you will pretty much catch most if not all divergencies

Check it out
Peter

PS As I mentioned above I trade the daily charts using RSI(9) AND CCI(10)
  • #529
  • Aug 30, 2009 1:46am Aug 30, 2009 1:46am
Hi Sim,
English is not Qqe's native language.

He is saying that when he has agreement between his Stoch signals and his trendline signals - he is confident in taking a new trade

Qqe, hope you do not mind me answering for you

Peter
  • #530
  • Aug 30, 2009 3:43am Aug 30, 2009 3:43am
Quoting lizpet
Hi Sim,
English is not Qqe's native language.

He is saying that when he has agreement between his Stoch signals and his trendline signals - he is confident in taking a new trade

Qqe, hope you do not mind me answering for you

Peter
Hi Peter,
Thank you for clarifying. Actually it is my third language that i learnt.
What you wrote is what i mean.

I will try CCI 10

Have a good day
  • #531
  • Aug 30, 2009 5:12am Aug 30, 2009 5:12am
Thank you peter and QPE
  • #532
  • Sep 3, 2009 10:45am Sep 3, 2009 10:45am
Trendline breakout and divergence on gbpusd daily show us a change in the price direction
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  • #533
  • Sep 12, 2009 9:36am Sep 12, 2009 9:36am
There is a bearish divergence , rsi drops and find suport at 40 level ( uptrend ) ,if we have a bounce from 60 level,with cci overbought , is a sign that the trend changed
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  • #534
  • Sep 14, 2009 12:11am Sep 14, 2009 12:11am
Hi Gavril,
The two trend commencement levels are RSI(9) 40 and 60

We go below 40 we have the start of a downtrend, if we have follow through
We go above 60, then we have the start of an uptrend, if we have follow through.
Trading between 40/60 normally signifies a sideways price movement (unless, for say an uptrend we have a trend reversal from a major correction, in which case the RSI will pass straight up thro the 40/60 level)

Regarding your above chart
The last time the 40/60 levels were breached, was a bullish move above 60, so it will not become a down move until the 40 level is breached to the downside
If it bounces between 40 and 60 - then it will be range trading (sideways)

The above is just my opinion, probably different from most - but it works for me http://www.forexfactory.com/images/icons/icon7.gif

Regarding divergence
Look for bearish divergence around the RSI 80/60 levels
Look for bullish divergence around the 20/40 levels

Bullish Hidden divergence primarily occurs around the 80/60 levels
Bearish Hidden divergence primarily occurs around the 20/40 levels

Hope the above is useful to someone

As always,keep your losses to a MINIMUM
Peter http://www.forexfactory.com/images/icons/icon7.gif
  • #535
  • Sep 14, 2009 1:36pm Sep 14, 2009 1:36pm
Quoting lizpet
Hi Gavril,
The two trend commencement levels are RSI(9) 40 and 60

We go below 40 we have the start of a downtrend, if we have follow through
We go above 60, then we have the start of an uptrend, if we have follow through.
Trading between 40/60 normally signifies a sideways price movement (unless, for say an uptrend we have a trend reversal from a major correction, in which case the RSI will pass straight up thro the 40/60 level)

Regarding your above chart
The last time the 40/60 levels were breached, was a bullish move above 60, so it will not...
I still have a lot to learn about trading , and this advices for me are gold.
I entered short this morning . What do you think about countertrend trading ?

Thanks Peter
Attached Image (click to enlarge)
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  • #536
  • Sep 15, 2009 5:38am Sep 15, 2009 5:38am
Hi Gavril,
I notice that you use both the RSI and the CCI - which I think is a great combination - they are both momentum type indicators but derived from different formulaes (obviously) - so if one "misses" a trade, there is a good chance that the other will pick it up - especially on divergencies!

As I have mentioned earlier, I do not trade Forex. I trade my super fund on stocks (I am not allowed to trade Forex). So I do not have access to Forex charts unless they are posted here.

Referring to your chart (GBPUSD, daily) above
The last good trade shown a good bullish divergence on the CCI and a so so divergence on the RSI (the last two troughs below -100 on the CCI)

The CCI also gave a bearish divergence with the last two peaks above 100 on the CCI, which also coincided with a pin bar whose tail was rejected by the upper channel line that you have drawn on the price chart.
The last bar resulted in the RSI trendline being breached to the downside and the RSI is now at the 60 level zone, so everything looks to be bearish
The RSI 60 level is a possible support level, who knows, but the odds are good for a downmove

Hind sight analysis is pretty good, hey! anybody can do it. Unfortunately its the right hand edge of the chart that counts and can create doubt

Gavril, If you are relatively new to trading a must read is "Trade your way to Financial Freedom (Second Edition) by Van Tharp
In it he details what are the most important factors for successful trading, and its NOT entries.

Keep studying your charts, find what works for you

Peter http://www.forexfactory.com/images/icons/icon7.gif
  • #537
  • Sep 15, 2009 5:39pm Sep 15, 2009 5:39pm
Quoting lizpet
Hi Gavril,
I notice that you use both the RSI and the CCI - which I think is a great combination - they are both momentum type indicators but derived from different formulaes (obviously) - so if one "misses" a trade, there is a good chance that the other will pick it up - especially on divergencies!

As I have mentioned earlier, I do not trade Forex. I trade my super fund on stocks (I am not allowed to trade Forex). So I do not have access to Forex charts unless they are posted here.

Referring to your chart (GBPUSD, daily) above
The last good...
Hi Peter,
Thanks for your posts. Eventhough I don't post much lately, I do read everything posted. Very helpful indeed. I also agree with you about Van Tharp's writing. I have read his book and have one of his courses and I must say it has been the most usefull trading material I have read.
Thanks again for all your feedback,
Kareem
Trade Garlic
  • #538
  • Sep 15, 2009 9:10pm Sep 15, 2009 9:10pm
Gavril, If you are relatively new to trading a must read is "Trade your way to Financial Freedom (Second Edition) by Van Tharp
In it he details what are the most important factors for successful trading, and its NOT entries.

Keep studying your charts, find what works for you

Peter http://www.forexfactory.com/images/icons/icon7.gif[/quote]

Yes ,I know the more important are r:r , money management ...the difficult part for me is to put all together . I will read the book you advice me.

Thank you Peter
  • #539
  • Sep 15, 2009 11:48pm Sep 15, 2009 11:48pm
Hi Kareem,
I did not intend becoming involved posting here, one of the reasons being - I am not sure if or not my experience of stock trading is relevant here ?(Forex)

In theory I suppose it should but......................

The Forex charts which I see posted here seem to show much more trending activity than what we get on the stock market

I have an open mind regarding trading and I am always looking for ways to improve my edge, and FF seems to be the place to be - so much info readily shared, traders helping traders, great!

Hope your other interests pick up, and look forward to you posting again

The RSI is my favourite comfort tool

Keep safe
Peter http://www.forexfactory.com/images/icons/icon6.gif

PS I have ordered Tharps latest book "Super Trader", should arrive this week, so I'll be going into solatery confinement for a while as I try to digest it

PPS Have you noticed that if you draw trendlines on a chart, that if you draw parallel lines to it - the multichannels formed are pretty good at picking out the relevant points. (Your initial trend line needs to be drawn thro significant points)
  • #540
  • Sep 16, 2009 12:04am Sep 16, 2009 12:04am
Hi Gavril,
It takes time and perseverance - you are streets ahead of most of us

Wish I had known what you know, when I was your age. (Don't know your age but I'm pretty sure its a lot younger than me)

Keep punching away, you'll make it http://www.forexfactory.com/images/icons/icon14.gif

Peter
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