God Bless the boss of the markets, you are a legen Thank you sir for an excellent and honest article.
Trading Strategies Headlines
The RSI scale has two defined regions — one starts at 0 and goes to 30, and the second covers the scale from 70 to According to Wilder, an RSI value falling within the 0 to 30 region is considered oversold. Some traders assume that an oversold currency pair is an indication that the falling market trend is likely to reverse, thus an opportunity to buy i.
On the other hand, an RSI value falling into the 70 - region of the scale, is regarded as being overbought. This signal suggests that the resistance level for the currency pair is near or has been reached and the rate is likely to fall. Some traders would interpret this as a sell opportunity i. In addition to the overbought and oversold indicators described above, technical traders using the Relative Strength Index also look for what is known as a centerline crossover.
This indicates the market trend is increasing in strength, and is seen as a bullish signal until the RSI approaches the 70 line i. This crossover occurs when the RSI value crosses under the 50 line towards the 30 line.
Develop your trading strategy and learn to use trading tools for market analysis. Learn the skills necessary to open, modify and close trades, and the basic features of our trading platform. Price Chart And Patterns. A trading strategy can offer benefits such as consistency of positive outcomes, and error minimization. Technical analysts track historical prices, and traded volumes in an attempt to identify market trends.
They rely on graphs and charts to plot this information and identify repeating patterns as a means to signal future buy and sell opportunities. Introduction to Trading Analysis. Leveraged trading involves high risk since losses can exceed the original investment. I definitely think it's possible to get the win percentage that high, but it requires more work, and more trades. I can do it with a high level of discretion, but the shit burns me out.
You have to grind it out within the noise, watching how the instrument reacts as every key level is broken. Steely nerves are required. It's hard to mechanize this successfully. I can't figure it out If you just latch onto major daily moves the profits for me end up the same. Lower win percentages, higher R: R, and larger drawdowns, but less work and achievable with a high level of automation. However, an overlooked method of using RSI is the use of trendlines directly on the oscillator itself in much the same way that they are used on price charts.
Connecting rising swing lows in an uptrend or lower swing highs in a downtrend, traders can find excellent trading opportunities with strong risk to reward setups. Because RSI measures the surge in closing prices, when RSI changes direction and either breaks above or below a trend line, a significant move in price can result.
Trendlines placed on this oscillator provide an additional level of precision as well as additional trade setups. Because the signals are leading rather than lagging, stops can be placed relatively close to the entry point. This allows for a good risk to reward trading opportunity. In the above chart of the very same GBPUSD 4-hour chart used in the previous example, trendline breaks identified several more setups. The use of the trendline provided additional visual confirmation that a trade opportunity was near.
The use of trendline breaks also gave buy and sell signals a few candles before the actual move.