Here are some steps to implementing an intraday forex trading strategy that employs the RSI and at least one additional confirming indicator: Monitor the RSI for readings indicating Now we get into a really customized version of a RSI trading technique. This is the RSI 2 strategy by Larry Connors. Basically, the RSI indicator is adjusted to a 2 period setting and the signal RSI Trading Strategy Step One: Find the currency pair that is showing a high, the last 50 candlesticks. (OR low depending on the trade). The Step Two Using the RSI Trading The RSI in Forex is a technical analysis indicator or tool that comes from the oscillator family that can maximize your profit. This trading indicator is a leading indicator that provides signals on The RSI strategies can also be used to know the best future price decisions. Advantages and key features. There are also some advantages and some key features that defines the elements of ... read more
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Risk Warning Trading Leveraged Products like Forex and Derivatives might not be suitable for all investors as they carry a high degree of risk to your capital. TRADE NOW. The default settings for this indicator is a smoothing period of We are going to change that setting to 8. Make sure you turn this setting before you jump into this strategy.
The reason I prefer eight instead of 14 is because the RSI will be much more responsive. This is critical when we are looking for overbought or oversold conditions and readings. Also, go into the RSI setting and change the lines in the indicator to 80, You will learn more about this later. This indicator will be the only indicator we use for this strategy.
This is because we have a strict set of rules to follow before entering a trade. And these rules will, without a doubt, validate a reversal for us to open a trade. Below is another strategy on how to apply technical analysis step by step. Before you use this strategy, make the following changes to the RSI indicator:. The Trading strategy can be used for any period.
This is because there are reversals of trends in every period. This can be a swing trade, day trade, or a scalping trade. As long as it follows the rules, it is a valid trade. We also have training for Forex Basket Trading Strategy. In this step, we only need to ensure it is the low or the high of the last 50 candles. This is a USDCHF currency pair and will be a BUY trade. Once we determine this low or high, then we can move on to the next step.
I drew vertical lines on the price chart so you can see the 50 candle low that we identified. If you need to use horizontal lines on your chart to verify that the candle has closed the lowest of the last 50, you can do so. This is not necessary but may be helpful for you to do and see how strong the trend is. When we find a 50 candle low, it needs to be coupled with RSI reading of 20 or lower.
Below we have a reading that hit the 20 line on the RSI and was the low of the last 50 candles. Once we see that we had a low, the last 50 candles, and the RSI is BELOW 20, we can move to the next step. Remember that this strategy is a reversal strategy. It is going to break the current trend and move the other direction. The second price low must be below the first low. Although, the RSI Trading indicator must provide a higher signal than the first.
Remember that divergence can be seen by comparing price action and the movement of an indicator. If the price is making higher highs, the oscillator should also be making higher highs. If the price is making lower lows, the oscillator should also be making lower lows. If they are not, that means price and the oscillator are diverging from each other. We have rules in place that will capitalize on this divergence so that we can make a significant profit.
Keep in mind that this step may take time to develop. It is very important to wait for this second low because it gets you in a better trade making position.
That is the Divergence. Remember that our example is a current downtrend looking to break to the upside. If this was a 50 candle high, we would be looking at the exact opposite of this step. Once this criterion has been met, we can go ahead and look for entry.
This is because the charts are showing us that a reversal is coming soon. The way you enter a trade is very simple. You wait for the price to head in the direction of the trade and wait for a candle to close above the first candle that you identified that was previously 50 candle low. If you are struggling with this step, save the picture for reference. This will help guide you when looking for a trade.
To place your stop, bump back 1 to 3 time periods and find a reasonable, logical level to put your stop. You are looking for prior resistance, support. We placed our stop below this support area. That way if the trend continued and did not break, it could hit this level and bounce back up in our direction.
I recommend you follow at least a 1 to 3 profit vs. risk level. This will ensure that you are maximizing your potential to get the most out of the strategy. You can adjust as you wish. Keep in mind that most successful strategies that identify breaks of a trend use a 1 to 3 profit vs. Here you can learn how to profit from trading. If you have questions or comments about this trading strategy you may reach us at info tradingstrategyguides.
The RSI Trading Strategy is great and is fairly simple to learn. However, counting 50 candles is a bit monotonous. This is one of the many reasons we have developed the EFC indicator that trades this strategy for you! If you would like to see a complete guide to the EFC indicator we wrote an article about it here! Please leave a comment below if you have any questions about RSI Trading Strategy. Also, please give this strategy a 5 star if you enjoyed it!
We also recommend taking some time to learn about our mean reversion trading strategy. We specialize in teaching traders of all skill levels how to trade stocks, options, forex, cryptocurrencies, commodities, and more. Our mission is to address the lack of good information for market traders and to simplify trading education by giving readers a detailed plan with step-by-step rules to follow.
I have been back testing this strategy for the last week. Thanks Guys! I am grateful for your Trading strategy guides RSI divergence strategy. It is a no holy grail but coupled with a sensible money management and understanding of price action, it definitely indicates the picks and troughs of the rhythm of the market.
My advise is, even when there is a confirmed divergence between RSI and price, buy signals in an uptrend and sell in a downtrend. Thanks for educating us. God bless. Would like an indicator that doesn't lag with high reliability with in terms of generating entry signals with minimal false positives.
I personally enjoy Simple graphical type indicators like arrows and bars changing colors to tell me which way to take my next trade. Thank you. What I look forward to seeing on an indicator is one that would be able to help me avoid chop, Most indicators are able to get one into or out of trade but are just dumb when it come to market chop. So my ideal indicator would be able to give me warning of the beginnings of a chop. It can weigh up all the factors and give a suggested probability rating so the trading can decide on his own whether or not to be conservative.
Interesting strategy. Have used RSI to verify what price action is telling me, but not with 50 period low or high. Fakeouts are a big problem. I'll try this strategy. The most important feature for me would be to get consistent results under all market conditions, i.
reliability that can be trusted at all times. In this way we are able to begin the analysis and wait for proper entry in advance.
On your question about the unique feature I'd love to see in an indicator, what I'd love to see in an indication is an additional feature to auto-trade, i. e enter the trade when the entry conditions are met. You only have to set lot size and put it on auto trade. This way, it can enter the trade and then send you an alert of trade entry, and you can then look at it and set your stop loss, trailing stop and take profit levels.
Alternatively you can indicate take profit and stop loss levels in terms of percentage or pips as well as the lot size lot.
This will really be cool. I want an indicator to be consistent. Once an indicator fails to be reliable, it is doomed for me. But if it is reliable, I trust it and it becomes a valuable asset. Much gratitude for this beautifully simple and straightforward reversal strategy, very clear and easy to follow explanation from start to finish can't wait to test it once markets open up again after the weekend.
I have been using a similar rsi divergence strategy, The EFC indicator you have created looks very interesting. Finally, some divergent patterns are more stronger than others, so maybe an indication of the divergence strengh, especially if the upper timeframes are in divergence.
Again, the EFC indicator looks very promising, just shared my thought of it could be even greater for my personal use. Thanks for the good work. I have 2 suggestions for indicators, the first would be an addition to EFC of coloured box which measures back 50 periods and set to max min price for that 50 period rather like price channel does although not chopping around like price channel , that box could then indicate a potential breakout of price action with the aid of a spot or arrow or change of bar colour.
I also like the idea of keeping non essential bars of neutral colour. I think the main indicator i would to have available for MT4 is market profile based on volume showing the POC and min max of key price area. Watched a wonderful demonstration of this yesterday in a webinar but it is not designed for MT4. Thank you, Tony. Being as a Full Time Trader FTT , trend is very important to me. It will show me very clear where my destination is.
For good and sharp entry, i need a firm and precise momentum indicator. Combination both of these will definately give me a very good trading strategy. For RSI, i rely on this setup:. It seem this system have both of it. And been translated into much more easier and friendly way for any type of trader. It just that as an additional, these system need to be equipment with any other supporting trend indicator in order to identify the market is trending or ranging..
As for myself i use MA Channel to support this trading system. I like this strategy just what I have been looking for thanks very much for your hard work.
Best Regards Graham. RSI is a simple indicator. With your trading strategy, it will be good to develop the system rather than manually plotting and looking at the conditions. I think you have a great informative site, so keep up the good work but the proof is always in the pudding. Ok - I jumped in and bought the indicator - it looks just like the example below. My only disappointment is the candles don't "stay" so if you leave and want to check back later the trade disappears once TP target is hit.
Also the TP line is not always visible on the chart while the trade is in progress and it doesn't "paint" in arrears for visual back-testing - so you need to be "in the moment" to "see" how the trade pans out - I'm not sure how to find the TP line if you can see it - you may be able to open the "objects" and see the value there and enter that number into your trade Best to keep the non-strategy candles and chart features as monochromatic i.
black and white or grey against a white background so that, during a trawl through the charts and time-frames, the sudden colour inject into the picture is much more instantaneously attention-getting. Really looking forward to getting this indicator.
Just one question relating to last 50 candles, I presume it is last 50 or more candles and not necessarily exactly 50 candles back? Very grateful for all the great training! I look forward to trying it. Please don't sell it via Clickbank, JVZOO or Clicksure. Their new policies on refunders mean that many of us in fact almost all of us in my Skype Group have been blacklisted for refunding scamster indies and EA's.
I don't run it. It's called YTR ex "Your Trading Room" and Vertue Traders both were scam defunctionary - the principals evaporated and the trainee prop traders were left in the lurch - having paid many thousands.
Australian regulator ASIC is totally toothless and disinterested in retail trader scams. Oh yes I remember that group. Terrible to see that happen, hopefully some of the traders were able to continue and find success in your trading. This is just the strategy of trading that I recently stumbled upon as I examined several chart formation and changes in trend both short term and long term. Your indicator will serve a great purpose of automatically finding those spots of change and making trading a delight that it should be!
Just me but like lot of comments, I've been through the indicator jungle. Settled on a few custom ones via ThinkorSwim. What I like about this EFC indicator is it seems to incorporate candle coloration of a temperature kind. Follows a logic hot to lukewarm to cool. In heat of the day it can't easy to get twisted around when money on the line so a 'fast glance' 4 color system really helps.
Should go well with the many strategies you've offered. I'd like to see you backtest using a smaller stop loss rather than the obvious one. I am much more interested in lower drawdown rather than a high winning percentage. I prefer to trade daily and 4 hour charts. How well does your indicator perform on these historically? Looking forward to reviewing your new to be released indicator. You have a good track record of putting out good easy to understand strategies that are profitable.
The bar is set high! Love the strategies you guys post this 80,20 strategy is very simple to apply and wit a little patience to wait for the rules to be met i can see this strategy can be very profitable.
Thanks guys for taking time to trace. This looks really good. Just what a newbie needs to improve understanding and results, Thank you for your efforts. If the EFC Indicator's basic premise is to clarify which way to trade and WHEN, I'd see that as being halfway there. Married to a sane breakeven philosophy, it would restore the below average retail trader's faith in ultimately getting to the positive side of the ledger for a change.
Divergence with RSI alone seems like something that I can do with Maybe this keep it simple method is the ONE we've been waiting for. Hello, strategy is built on simplicity, which I personally prefer. Definitely I try tomorrow, looking forward to the novelty will be interesting: D.
You asked what I would like in an indicator? There is no Holy Grail as most already know, but something that would create a solid indication of where to enter and exit a trade, along with it confirming a trending market. Although what I would REALLY like in an indicator is a two armed, two legged one that would mentor me - helping me to be much more confident when I pull the trigger and not dither like my nana, and when to bale on a trade, and to walk with me as I trade for a period to guide me in my approach.
To make me a professional trader and not a wannabe trader. How can I bolt one of these onto my MT4? PS: No disrespect to any nana's out there, but OMG ask mine to make a decision and you need to sit down and make a cup of tea to give her time - a hereditary trait it seems.
Cup of tea anyone? Combining reversals with a look back for previous market tensions is good. One vital feature for an indicator is that used profitably and frequently the price action it is revealing to the user becomes so familiar that you learn to read the market without the indicator.
Is there a way to show on the charts the last 50 periods. Even a line that is plotted 50 periods prior and moves along as each period moves forward. Also, has anyone tested as to which timeframe this strategy works best for. I'm a relatively new trader so any thoughts and advice would be greatly appreciated. Thanks, going on 10 years of losing have been trying to make my own system with the "Color-Coded Bars" - you "beat" me to it - Looking Good! God Bless you richly! Chris Endrizzi endrizzi.
chris gmail. com PDF file available: "Basic Distinctions" In God's Two 2 Different Programs! Looks interesting, and I look forward to learning more on Friday. On the subject of what I look for in a strategy, I look for a system that is "as simple as possible, but no simpler", as some guy with a strange haircut who should have gone to Specsavers reportedly once said! Seriously, if a strategy is too complicated, it just will not get used. Better to trade a simpler system repeatedly, even if it means the returns are not quite as good as the really complex system.
But hey, that's just me! no need to over complicate things. If you like a mess on your charts and understand them then great, but most traders would most likely agree that simple or even "naked" charts price action strategies work best for them.
Hi thanks for all your great strategies, I am now finally starting to make some good profits this last 3 weeks keep up this excellent work. Congratulations Sam! We selected you to receive a free EFC indicator! Contact us at info tradingstrategyguides. com and we will send you your information! I have never been a RSI fan, prefer stochastic and MACD, but this looks like a nice twist using it with Price Action - will give it a try. With regards to previous comments about win rates, the Holy Grail is not the win rate but it is the Money Management.
I like the clarity of your presentations, keep up the good work. Thanks, great advice Graham! Without properly managing your money, you are doomed to fail at the start. Nice strategy. I also liked your fractal strat. Thanks for all the great ideas. Whichever one comes first. You need to have both elements high the last 50 candles or low the last 50 candles coupled with divergence in price action with the rsi to meet the rules of the trade. Then obviously make the trade when the price action goes above or below that first identified candle.
So are the RZs based on that? When the bar closes - no more repaint. No signals 3,7 or 10 bars back. Easy to spot simple chart. If additional filters is needed, then why not let the indicator do the work and only show the good signals?
If it works on all timeframes and all markets it is also good. To put it short: I want the indicator to do most of the calculations for me. Keep the comments coming guys! Remember we are giving away access to three of these special indicators on friday! Everyone who has commented so far is entered into the contest! But if you have a system with a strict set of rules you follow that more often then not will produce profitable trades, then you are on the right track!
Its that constant "tweaking" that makes a trader become good to great! png Like this?? We weeded out most of the false "head fakes" so you should be getting accurate reversal trades with our indicator. Well Oteng, if there ever was an indicator that can do that, I tell you human traders would be obsolate or never needed again in trading. Brokers will cease to be in business and there won't be anyone on the other side to take one's trades.
Or still the banks and big institutions with the money will still get their hands on it and put a way premium price on it to make it impossible for retail traders like you and me to get it. It will be a secret weapon and they'll use it to still beat us to the game.
Hello there, Ineresting article! But I still find the strategy somewhat complicated. Well, why count till to 50 bars and what is the logic behind this?
Join Our Telegram Group Chat - CLICK HERE. This is a counter-trend rsi forex trading strategy. We know that many of you do not trade against the trend; however, you are not looking for a trend move but more of a scalp with this strategy. Our target depends on the signal timeframe. The point here is to choose a precise point and exit early with few pips depending on the timeframe. So, in a nutshell:. First, put the indicator and open the 1m chart. It will show you the RSI levels on all timeframes for that currency pair.
The RSI reaches 20 or less we enter long. A better signal is when two or more timeframes have the same low RSI signals. A more powerful signal would be a forex divergence on the chart that suggests our position from that entry. The RSI reaches 80 or more we enter short. A better signal is when two or more timeframes have the same high RSI signal. In the first chart setup, even though it moved down then up to continue a strong up move, you could get at least 10pips; as I said, your target should take timeframe into account.
The first signal appeared only in the 1-hr chart. It takes some consolidation to free up the ob reading. In the second setup, Both 4hr and 1hr were above 80, a stronger signal to sell into correction; the chart price corrected 30 pips without spread almost.
True, it goes up again. We only use to get pips during the trend corrective move. Do not be greedy; one or two forex reversal candles can be good for you. Please do not wait for the entire reversal of the trend because it needs more than that. Make the level line red and clear as they are on RSI extremes.
Put a WMA on the chart This is only just for guidance, so we can see how far the chart price went away from the moving average. we have seen in many situations how chart prices try to narrow the distance between this MA and not stay far away, especially when the market is at the extreme.
We will need a good eye to catch clear opportunities. Add to the position if it moves against your trade, and stay confident that you can close your positions with a small profit or at least at breakeven. Save my name, email, and website in this browser for the next time I comment.
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Please make sure that you fully understand the risks involved, taking into consideration your investment objectives and level of experience, before trading, and if necessary, seek independent advice. Please read the complete Risk Disclosure. Privacy and Policy Terms and Conditions Advertising Inquiries. Best MT4 Broker with lowest cost. ZERO swap fees on gold. FREE Trading Signals. Exclusive access to PRO Trader tools. Press ESC to close. Free Download. Share Article:. forex , forex indicator , forex indicators , forex strategy , free forex indicators , free forex strategy , rsi , strategy.
Ghost32 [email protected]. October 28, Crazy Lock V3 EA For FREE Download. November 1, Profitable Breakout EA For FREE Download. Leave a Reply Cancel reply Save my name, email, and website in this browser for the next time I comment. Drop file here Notify me of follow-up comments by email. Facebook-f Twitter Youtube Telegram Discord. Our Sister Sites. FXCracked Just4Forex TradeWithSam. Quick Links. Homepage Forex EA Forex Indicators Education Brokers Our Group Chat Media Kit Contact Us.
RSI Forex Trading Strategy. The RSI forex trading strategy is an intraday forex trading strategy that combines the Sadukey, Forex Analyzer Pro and RSIFilter custom indicator. This is by far the best 2 period rsi trading strategy ive seen. With the steps we discus in today's video, i show how to find super accurate entries with add Now we get into a really customized version of a RSI trading technique. This is the RSI 2 strategy by Larry Connors. Basically, the RSI indicator is adjusted to a 2 period setting and the signal This forex strategy is based on selling when the market is overbought and buying when the market is oversold; The indicator we use is RSI MTF,You can Download it blogger.com plotted The RSI in Forex is a technical analysis indicator or tool that comes from the oscillator family that can maximize your profit. This trading indicator is a leading indicator that provides signals on Here are the steps to using this RSI strategy: Plot a period simple moving average (SMA) to determine the overall price trend. Add the RSI indicator and change the settings to 2 ... read more
Cup of tea anyone? Table of Contents hide. Audy W says:. These natural phenomenon like the Fibonacci sequence have a way of working in trading markets. Price action is king which is proven over and over again.These cookies do not store any personal information. Olebile Lebz says:. Kevin Strydom says:. SuperTrend Basic Forex Trading Strategy. Close this module.