Simple RSI System

hi,
I have been using the indicator RSI for sometime now and it seems its quite a profitable indicator if used in the right way. Since there are many RSI systems and I am doing nothing new as such so i shall be naming it as the simple RSI system.

Though this type of system is not new and people have been using it similarly in systems like EUR GBP King etc.
But a through study of all the RSI systems has led me to believe that we are not really using our experience to benefit from the RSI, especially from what it has to offer.

OK Enough Crap... Lets get to the system

RULES:
Buy when RSI less than 30 (or 25 for conservative entry)
Sell when RSI greater than 70 (75 for conservative entry)

Now I have been trying this on EU UJ AU for quite sometime and it really works to snap out 10-15 pips out of the market.

The guarantee of an entry is that however low the price goes there is always the possibility of getting it back to breakeven (unless there is a strong trend)

Now I would really appreciate some inputs regarding this with respect to
- analysing Multiple time frame data to refine entry.
- analysing Market volatility to refine entry and exit.

Pitfalls: Strong trends in which the price stays overbought or oversold for longer periods making a proper entry and exit difficult.

I know this is not perfect system but the pros on this forum can really spark it to one.
Please try not to use any more indicators if possible to keep things simple.

What time frame have you found best also what period off rsi are you using..

I have found 5M timeframe to be the best for this method.
Initially I started using the 1M timeframe but 5M gives stable results and better profits.
RSI settings are standard ie. 14 period RSI

I also use the RSI alert metatrader alert for voice alert of RSI going into the trigger zones.

The tricky part is entering at the exact dip/peak of the move or approximately at the dip/peak.
The RSI can dip to 25 or even 20 sometimes even without an event, but these are rare times and during strong trends.

However at those times the retracements are more (around 20-25 pips)

So lets see if we can get some constructive comments on this one.
Looking forward to your replies.

You might would want to try this with HA candles on the 5min, ive been doing the same thing with 10-15 pips take profit for quite some time now. rsi set at 14 with e-mail alert.

I forgot to mention I buy/sell when rsi is in o/b o/s condition.

I've tried this but unfortunately it does not work well enough to make CONSISTENT money.

If you can make consistent money doing this, the more power to you.

Grab the trix from the thv thread, use as filter.

How do u use TRIX and how does that help in filtering trades...
Can u tell me ur exact entry and exit rules ..
I will read about trix and heiken ashi myself...
Just the exact rules and what all things u take into consideration when taking a trade....

More power to you too...

SL has to be tight, pivots are also involved, beware of strong S and R points. Enter trade when fast trix changes color and color of HA candles turn colors.

Actually as regards SL i consider a 20-25 pip stoploss to be adequate as even if the market goes 15 pips against you , there is always going to be a pullback soon which will give back the 15 pips loss and you can breakeven.

If market goes against by 10+ pips then u consider it as a bad entry and try to breakeven atleast ...
are there any inputs for the trix indicator like periods etc. kindly share urs and I will see how it works and post results here...
More power to you ...

Any reconfirmation signal for entry & exit??

Well if we wait for reconfirmation signals then many times it takes away the leading edge of the indicators that we are using, which is the primary strategy..

So its basically speculation as to how much extremes of RSI can a price really go and entry at around 25 or 75 approx...

If u have a leading indicator for confirmation then let me know

Thats why you need tight SL, there will be other entries forming but you will not be able to take advantage of them if you are stuck in a bum trade.

RSI alert with e-mail.

What exactly do u mean by tight SL .. ie. how many pips on 5m TF

apparently its a one time entry or at the most 2 time entry as regards my trading ...

I enter adn then just wait for it to pull back ... if it dips another 15pips then i reenter with double the previous position and here is where i put stoploss of 20-25 pips ...

rest of it is just arbitrary ... so that is why i needed some indicator which can predict to some extent the strength of the very current trend which could help me to identify if i am supposed to enter at 72/28 RSI or 75/25 RSI or 80/20 RSI or not enter at all...

If anyone can help me with this we have a really good system at our hands...

Looking for your help ...

i would personally stay on the conservative side:

-higher level values (i use 90 & 10 but it's your call)
-stick to higher timeframes H1+ until you really understand how it behaves
-no entry until cross UP from the lower level or DOWN off the higher level
-no entries against the trend (must judge this by eye)

also, period 14 is very slow. experiment

good luck
mark