What are your thoughts? BB + RSI 14

Afternoon all,

I've been trading for about 6 months now, trying to improve my scalping and ive realised that (as this isnt my main source of income as im a student) that i am more interested in a more reliable and LESS risky return even if it is lower than what would be obtainable if i scalped and day traded.

I've been looking into incorporating bollinger bands (20, 3) and RSI 14 together.

Obviously this is nothing new, im sure a number of people on here use this method:

1) Use a 1 hr chart
2) when RSI > 70 & 1hr is above the upper BB, enter short
3) when RSI < 30 & lhr is below the lower BB, enter long

Not brain science at all. I've had a little look at backtesting and it looks quite solid but i'm looking for ways to make it even more solid. This is where i was looking for your feedback...

I was looking into

1) Ichimoku clouds
2) Normal support resitance and fibonacci numbers to increase the chance of a change of direciton
3) moving averages - not sure how helpful these will be though
4) any other suggestions?

Obviously I am not expecting this to make me a a millionaire, but 20 pips a day would be very appreciated and +pips is better than -pips.

I was thinking about buying in with 2 lots and stop loss of 25 pips.
Once I've made 25 pips i will sell one lot and move the other stop to break even thus letting the other run.
A manual stop will be used or alternatively a trailing one of 20 pips just in case i hit a real move.

I was looking into EURUSD, EURGBP



Please let me know your thoughts, looking to have a little play with a demo account at the end of the month for a while to see what its like

Concentrate on price action and support/ resistance as primary tools and indicators as secondary tools just for confirmation (not to be relied upon for entry and exit). Work on your risk reward i.e. don't take trades less than 2:1 (Reward:Risk).

trendlines....

I agree with Porpie. I use price action, support & resistance, trendlines and trendfans.

Any approach is going to work if you spend enough time with it to learn its intricacies and nuances, but nothing is going to generate a return right out-of-the-box.

That said, if you're just starting out, it's a waste of time to develop something that doesn't work in all markets. Selling supply - buying demand works in all markets, as do chart patterns, as do trendlines. But again, no approach will be consistently successful until you learn how to use it.

Rob

support and resistance with price action

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Bullish Engulfing line

Dump everything off of your charts into the toilet. Otherwise, it's too hard to see the market through indicators - time is so precious and lord knows it takes long enough to see what the market is doing even without those time-killers. Even try and go beyond this and get rid of all of the stale, overused jargon like "price action" and "S/R". How? By opening our eyes and our brains and seeing what the market is doing. It's doing something - it's trading within a price range and then exploring new ones. It has a purpose - to facilitate trade. It's not like dice or roulette - unless you approach it like dice or roulette. We need to wake up and dump 95% of this forum in the frigging toilet and not look back. I don't mean that to sound harsh - it's the same as any process of discovery; any process of refinement.

thanks guys, interesting to see some for and against the use of indicators.

there's a fairly similar thread. see jankone's thread. this thread, imo, is a "little brother" of james16 thread (so, read the james16 thread too).
there are a few Ichimoku threads here too.

Bollinger bands & RSI both perform better in ranging environments. If you are going to trade based on these two indicators, I would focus most of your energy on learning to identify if a market is trending or ranging, because fading the bollinger bands & RSI in a trending move is going to eliminate a lot of your wins.