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The RSI Trade

  • #541
  • Sep 21, 2009 11:11am Sep 21, 2009 11:11am
Quoting lizpet
Hi Kareem,


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)

Having fun with channels and rsi.
For Peter...You are the best .Good reading ( I'm 25 years old )
Attached Image (click to enlarge)
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  • #542
  • Oct 4, 2009 7:07am Oct 4, 2009 7:07am
Hi Kareem,
Your original basis of this thread is based on RSI trendlines

For trending markets:
How do you know which RSI pivots to draw the RSI trendline through? You probably don't? - Until you get a trendline break - if it has been drawn correctly, the trendline break should coincide with a directional change of Dow Theory of the RSI pivots??

So whats the point in drawing trend lines across RSI peaks or troughs?. Why not just apply Dow Theory to the RSI peaks or troughs?

The RSI makes it very easy to pick out peaks and troughs (based on close etc), than using the basic price chart - unless you are an experienced chartist

Price is king and RSI helps us "see" whats happening.

Just a thought - check it out

Regards
Peterhttp://www.forexfactory.com/images/icons/icon7.gif
  • #543
  • Oct 5, 2009 12:20am Oct 5, 2009 12:20am
Just to add to the above post

For rangebound or consolidating markets:
i.e. price is range bound/consolidating when the RSI is "stuck" between the RSI(9), 40 zone-60 zone band

This is a good place to draw trendlines to identify chart patterns e.g. triangles, rectanges etc which may lead to a breakout to trending / or simply to trade within the range limits.

When the RSI is trading between the 40/60ish zone levels, it can be a bit more difficult to interpret as the trace may in fact be trending and is passing through the rangebound zone and up through the 60 ish level and thus confirm an uptrend .
For an uptrend the trace may have originated from a major retracement or downtrend "V" reversal (which would originate from the 20ish level)
For a downtrend the opposite applies

If this is a concern, a consolidation can easly be confirmed by using a non directional type indicator such as the ADX(10), a value below 25/20 signifies weak price action which is not capable of trending.

Hope the above makes sense????????????????
As usual, always check out anything that I or anyone else says before committing to using it!

If you use indicators - you should always know how/when to use them and what market conditions they work best in

Price is still king

Trade well
Peter
  • #544
  • Nov 1, 2009 9:34am Nov 1, 2009 9:34am
Sorry for the late response. Still here, but not trading much. My work is consuming most of my time lately. I will get back in the game soon, and hope you keep the thread active.
Kareem
Trade Garlic
  • #545
  • Nov 18, 2009 2:52pm Nov 18, 2009 2:52pm
Hi, good system. Do you enter and exit on the close of the candle which breaks the rsi trend line or do you enter or exit as soon as the rsi trend line is broken?

Thanks in advance
  • #546
  • Nov 21, 2009 9:39am Nov 21, 2009 9:39am
Quoting Dave1
Hi, good system. Do you enter and exit on the close of the candle which breaks the rsi trend line or do you enter or exit as soon as the rsi trend line is broken?

Thanks in advance
Hi Dave,
As soon as it breaks. which should break before the price trendline.
Thanks
Kareem
Trade Garlic
  • #547
  • Nov 22, 2009 7:13pm Nov 22, 2009 7:13pm
Here is a trade I took Sunday night. I am currently using 2 and 4H charts. I found that 2H charts work best for if you not have the time or wish to day trade. Please note the first trade ( long) did not work out. But I did moved my stop to break even after 20 pips and was out, but the second seems to working very well...so far. Again my stop is at BE now. Again note how the RSI breaks before the price trendline does. I will update tomorrow.
Kareem
Attached File(s)
File Type: pdf CHF, H2 .pdf   33 KB | 428 downloads
Trade Garlic
  • #548
  • Nov 22, 2009 8:08pm Nov 22, 2009 8:08pm
But I have to go. I have but in a limit order at the 1.0050 price support level, which is also a RSI trendline support as well. Stop still at BE. I Will check it out tomorrow morning. Good night.
Kareem
Attached File(s)
File Type: pdf CHF, H2_2.pdf   27 KB | 445 downloads
Trade Garlic
  • #549
  • Nov 23, 2009 6:53am Nov 23, 2009 6:53am
It broke a longer trendline. Still in for the 1.0050 target
Attached File(s)
File Type: pdf CHF, H2 _3.pdf   26 KB | 371 downloads
Trade Garlic
  • #550
  • Nov 23, 2009 9:02am Nov 23, 2009 9:02am
Got out before housing news. + 109.
Kareem
Attached File(s)
File Type: pdf CHF, H2 _4.pdf   21 KB | 364 downloads
Trade Garlic
  • #551
  • Nov 23, 2009 3:42pm Nov 23, 2009 3:42pm
How did I get the best exit for the day? I got lucky. I just decided that 100 pips is a good run.
Attached File(s)
File Type: pdf CHF, H2 _5.pdf   21 KB | 417 downloads
Trade Garlic
  • #552
  • Nov 23, 2009 5:35pm Nov 23, 2009 5:35pm
Well done Kareem, well done

AZ
I found the guy who keeps losing me money. Its "ME" SHOOT HIM!
  • #553
  • Nov 23, 2009 6:15pm Nov 23, 2009 6:15pm
Quoting AZ-Heat
Well done Kareem, well done

AZ
Thank you AZ. Nice to see here again. I off work most of the week. I will try to make up posts, if the the markets lets me!

Kareem
Trade Garlic
  • #554
  • Nov 23, 2009 6:31pm Nov 23, 2009 6:31pm
Nice one setting up. Risk at 1.5000 Reward 1.4800. I will watch for the cross before selling.
Kareem
Attached File(s)
File Type: pdf USD, H2 .pdf   23 KB | 448 downloads
Trade Garlic
  • #555
  • Nov 24, 2009 4:33am Nov 24, 2009 4:33am
hI Kareem,
Nice to see you back,

I've primarily been interested in trading the RSI S/R levels and divergencies, but have recently been checking out the potential of using RSI trendlines, and therefore the associated RSI pivots - and it looks very promising.

It has always been my belief that all similar type signals do not offer the same potential $ return, i.e. some are better than others!
In the case of trendlines where they occur in the RSI 0-100 range.

Keep up the good work

Peter
PS I liked how you undated your trend line to get the maximum $ return.
Basically, I look at trendlines similar to you. You can draw a trendline as soon as you have 2 pivot highs or lows and that is the current correct trendline.
If price accelerates, the RSI trace will move at a steeper angle, when a pivot forms and it cannot be connected to the start point of the inital trend line without passing thro the RSI trace, then we draw a new trendline from the new pivot to the nearest pivot to the left (which will be the 2nd pivot used to draw the inital trendline) this is now the correct trendline - keep doing this until you get taken out. Doing this ensures that you do not give back too much profit.
There I go rambling again http://cdn.forexfactory.com/images/icons/icon10.gif
  • #556
  • Nov 24, 2009 4:52am Nov 24, 2009 4:52am
Good morning
I trade only with RSI and nothing else.
I like to ask if Anyone knows a site that can give Us a currency screening like is done for shares
Screening all the currencies for RSI 5 minutes (or 10m 30m 1h day and so on) oversold or overbought.
Or maybe You can make a list of the majors.
So a trader can know instantly which one to trade without losing too much time looking at each one of them
At the moment I only trade EURO/USD but only when it is overbought plus 70 or oversold minus 30
I believe One can screen also with other indicators.
Thank You and have a good day trading
  • #557
  • Nov 24, 2009 10:16am Nov 24, 2009 10:16am
Quoting lizpet
hI Kareem,
Nice to see you back,

I've primarily been interested in trading the RSI S/R levels and divergencies, but have recently been checking out the potential of using RSI trendlines, and therefore the associated RSI pivots - and it looks very promising.

It has always been my belief that all similar type signals do not offer the same potential $ return, i.e. some are better than others!
In the case of trendlines where they occur in the RSI 0-100 range.

Keep up the good work

Peter
PS I liked how you undated your trend line to get the...
Thank you for the kind post Peter. I wish we can see your charts one day. Try printing to PDF and post. BTW, you never ramble. Your posts are always very insightful. Please keep posting new ideas, discoveries.
Kareem
Trade Garlic
  • #558
  • Edited 1:14pm Nov 24, 2009 1:13pm | Edited 1:14pm
Quoting ruffyn
Good morning
I trade only with RSI and nothing else.
I like to ask if Anyone knows a site that can give Us a currency screening like is done for shares
Screening all the currencies for RSI 5 minutes (or 10m 30m 1h day and so on) oversold or overbought.
Or maybe You can make a list of the majors.
So a trader can know instantly which one to trade without losing too much time looking at each one of them
At the moment I only trade EURO/USD but only when it is overbought plus 70 or oversold minus 30
I believe One can screen also with other indicators.
Thank...
Hi Ruffyn,
I believe freestockcharts site have that. They offer FX quotes and it is a free site, give it a try.
Good luck
Kareem
Trade Garlic
  • #559
  • Nov 24, 2009 3:11pm Nov 24, 2009 3:11pm
Note how the same support trendline is becoming resistance now. Got a quick scalp on the bounce. It was good for 25 pips.
Kareem
Attached File(s)
File Type: pdf USD, H2 .pdf   25 KB | 392 downloads
Trade Garlic
  • #560
  • Nov 24, 2009 6:58pm Nov 24, 2009 6:58pm
Hi Kareem,
Here's something that may be of interest? check it out.
RSI Pivots:
We have a trend when we have a series of higher pivot highs and higher pivot lows and that trend is in place as long as this condition continues

A trend (we can have trends within trends) can only change when this condition changes

i.e. Looking at your post#554

We have a series of higher hi and higher lo pivots since we had the RSI draw a 2nd lower pivotallowing us to draw our initial trend line as you have shown
After this second pivot low - price accelerates and gives another higher low - that cannot see the 1st pivot low of the existing trendline ---------- so we draw another trendline from the new pivot lo to the preceding pivot lo - this is now the trend line for the current RSI action
A breach of that trendline tells us that we may have a change in trend (the angle at which the RSI trace breaks the trendline may be of help?)

As I mentioned earlier a trend cannot change unless the sequence of higher high/higher lo pivots is broken

In our example, this occurs when the low preceding the highest high is taken out (inferring that a lower lo is in the process of being formed) and this confirms the break of the new trendline.
We would have got this signal during the formation of the large red "outside bar" (2nd bar in from the vertical time line)

There is now a good chance (nothing is certain) that the trend will reverse - it may go sideways, the one thing of which we can be sure of is that the odds are that the previous move is over.

Again easy in hindsight, but try it out - it may work for you

Take care - its the exits that count

Peterhttp://cdn.forexfactory.com/images/icons/icon7.gif
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