Rsi trading strategy

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How Does the RSI Indicator Work?

RSI is similar to Stochastic in that it identifies overbought and oversold conditions in the market. It is also scaled from 0 to Typically, readings of 30 or lower indicate oversold market conditions and an increase in the possibility of price strengthening going up. Readings of 70 or higher indicate overbought conditions and an increase in the possibility of price weakening going down. In addition to the overbought and oversold indicators mentioned above, traders who use the Relative Strength Index RSI indicator also look for centerline crossovers.

A movement from below the centerline 50 to above indicates a rising trend. 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.


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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. 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.

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RSI: How to read the trend-spotting indicators such as MACD, RSI - The Economic Times

If you have questions or comments about this trading strategy you may reach us at info tradingstrategyguides. 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! 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.

Thanks, Traders! 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.

Other Platforms are being considered but at this time these are the only ones supported. This version is packed with many NEW features like:. Learn More Here Its also available on Meta Trader 4 with a custom dashboard.

Relative strength index

We recommend checking this out and adjusting the EFC to your preferred settings to see if it is consistenly profitable! Any questions let us know! We want to share with you some important information about Trading Strategy Guides as we move forward to our goal to help 1,, Traders find a strategy that suites them best.

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Before You Start Using the RSI Indicator - Fundamentals

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Super Easy RSI Indicator Strategy For Beginners... (Insane Results!)

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One of our Members told us this,. We look forward to hearing from you! But times are changing and this bonus will be going away soon as we move forward.. To your success,. A super deluxe bonus we offer is going away. You received this email because you are subscribed to Marketing Information from Trading Strategy Guides.

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The manual channel function is one of my favorite features Keep up the good work guys! Thanks" -Rob B. Let us know if you have any questions.

RSI Trading Strategy: The RSI 80-20 Rule

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One from the previous break of the channel and the second on the current breakout of this channel that was plotted for you.