The RSI Trade

Shreekapash, what TF was that ? I was seeing a classic regular Div.. I am testing different versions of RSI as mentioned in the thread. You are right, RSI also fascinates me more than any other indicator. I hope to contribute next year regularly. Thanks to kareem and our master15min trader andypips...

Hi Marple,

TF was 15 minutes and RSI 21...

There was a typo in that post, SL was 5920.. SL hit... I normally use 40-50 pips sl.. above this is not good.. why giving away pips...

Actually i am trading less for sometime.. Last month I got good loss... many losses in a row.. So decided to study more.. I have tried many things and as a result this month losses reduced...

I also started to use small stop losses this month... And I am using divergence more than breakout...

I bought on 5841 and closed with 40 pips.. If I stayed in that trade, I already have 200 pips... lol.. But we dont know what is coming next...

After trying and doing many many things and indicators, I moved to RSI last month... Now I have win rate more than any other method or indicators... We only need to filter some bad trades...

This is about the volume thing..
Few minutes ago gbpusd hit 6144, MM line 1/8 on 15 minute chart...
Then down to 6115 and staying around there now...
RSI reversed also..

I was watching the price from 6073 to 6144.. the Volume still the same, not changed... BMC sell price still showing 6074.. Now the price collecting buy volumes and sell volumes.. It will collect enough sell volume and go to 6074 first.. then it will decide what to do...

Lets see.. will update later.. price now 6114..

Edit: If the BMC buy price get update to any of the current level, gbpusd go up more...

Update: The max buy and max sell moved to current price levels, i.e, 6115 and 6116. As a result, gbpusd should go up.. RSI on 15 minute also reversed... The low was 6108..

Price jumped from 6113 to 6137, then down to 6125 area, then now up again... Now on 6136.. I am trying to understand the volume analysis with RSI.. If both can combine, there will be no other things powerful like this...

Price hit 6144 again and max sell moved to 6134..
It was 30 pips profit from 6115-6144..
Now dont know what price going to do.. my experience is very little on this volume thing...

Price again upto 6151 and RSI showing little reverse..
Also max sell volume accumulated on 6134 have no change...
So I given a sell on 6151.. sl 6180.. above 2/8 MM line...No TP...

Lets see whats going to happen...

Update: SL hit beautifully... -29 pips..
.............

Seems sell volume absorbing buy volumes.. RSI 15 minute and 4 hour showing possible reversal.. I have given short on 6193, sl 6240, tp open.. probably 6134, then 5982...

Seems as most break are happening in the London session ( in my sleep). So again no trades for me.
Sreeprakash, thanks for your posts again.
Kareem

Thank you kareem bro..
In the previous trade, SL missed for 1 pips and now back and running in profit.. lets see how much it goes...

Markets are going to close...

HAPPY NEW YEAR EVERYONE!

If break 6140, then there is a possibility that it can go to 5982 areas...

hi kareem40

i met a situation on Thursday,below is the picture.
i drew a line,and wait the RSI indicator to break the dot "1", i think it is a signal for buy,but it is a false signal,the price went down soon.
how to deal with the situation?how to check whether it is a right break or not?
sorry for my bad english.

yourspace

Hi Yourspace. This does happen for many reasons. The first, and most important,
is that "the markets can and do anything at any time." So set you set loss and consider it cost of doing business. But in order to minimize this from happening I did the following. If the RSI break it should do it hard and fast, so do move your stop to break even when you are plus 20. If you are stopped at BE then the move was not a good one, and you might see a bounce off the line ( so you can reverse your trade). Also I have noticed that I get less of these using higher time frames. Currently I am set on the 1H charts. To be honest, I truly starting to believe that Forex need to be traded at even higher time frames!!
Last note on the break, do not wait for candle to close, you can miss many good trades this way. If you are trading the 1H charts, go in as soon as it breaks, especially if it is a long trend line.

Happy new year to all. It has been great having you all as my trading friends in 2009 and hope to continue this friendship in 2010.

Kareem

Best wishes to you also Kareem, thanks for all your input..

Danny.

yourspace, the trend reversed there...

RSI above 70 considered as overbought normally, but price can go up more...
Also stoch overbought there...Possible reversal sign...

You have to check pivot levels there.. also drawing trendlines are the key... More practice needed...

Actually I am not using break.. i am using divergences now... sometimes the price will break, then reverse and gives loss... I am feeling safe on divergence.. because when a trendchange happens, a divergence occurs.. and I can enter at that reversal point normally...

In breakout, we enter after good pips leaving behind.. and we dont know if the breakout is valid or it get reverse...

Find the higher timeframe trend, then look for entry in smaller timeframe.. then ride with higher timeframe...

For example, yesterday gbp reversed on 6236, fell down to 6210, tested 6236 again, there was a MM line there, I have my SL above that line, not touch, then price again fell to 6125.. it was a nice ride...

The pic attached is my entry point yesterday..
My entry got bad, on 6093, I have placed sl on 6140, it missed 2 pips away I think... Then fell down 110 pips something....

See the RSI line I drawn.. there was a reversal there, I entered, but RSI changed direction and trendline broken and hit RSI 80, then fell down..

As you can understand from this, there is no method is 100% success.. Use good stop loss, use pivot points, and stay with patience...

If one trade got fail, check things, analysis again, think how it got loss..
Then trade again...

It`s 2010, and I want to especially thank kareem for this thread and sreeprakash for his hard-working excellent chart contributions.....

" If you follow Natural Law, the Universe will work for you ."
( Maharishi Mahesh Yogi )

hi kareem40
hi sreeprakash

thank you for the explanation.happy new year.

yourspace

Thanks marple and yourspace...

Marple, thanks for your kind words.. I know I am not perfect, but trying to understand the market and trying to follow it..

Hope we can make the things to a new level this year... and benefit for all...

Thank you msmarple,
Kareem

I know this post is from last year , but I think it perfectly describes the simplicity and benefit of using trendlines with RSI (very clear chart posted) : great stuff, Andy.

and Happy New Year to everyone on this great thread .