Relative Strength Index Strategy (RSI Strategy) | Forex Indicator Download - MT4/MT5 Resources - MetaTrader 5 Resources
This is a trading strategy based solely on the RSI indicator. You only need MT4 and this indicator http://www.mql5.com/en/code/10972
I want to clarify that this is a contrarian strategy . I know many of you don't trade against the trend, but with this strategy you're not really targeting the trend movement, but more of scalping . My goal depends on the signal timeframe, the key here is to pick a precise point and exit a few points early (also depends on the timeframe). in short:
- This is a contrarian strategy
- This strategy is based on selling when the market is overbought and buying when the market is oversold
- The indicator we use is http://www.mql5.com/en/code/10972 (RSI MTF) plotted on 1 minute timeframe so you can view RSI levels in one window without having to go to every timeframe from 1 minute to 1 week timeframe
- You must take small profits and do not try to pick tops or bottoms as the market can remain overbought/oversold for long periods of time. For example, if you wish to capture a larger move and set a TP on entry when the move starts to go in your favor, use Stop Loss/Take Positioning.
- Available for all currency pairs/all timeframes
Before I show you some example trades (including ones I made using this method), let me say this:
I know a lot of people disagree with contrarian trading, but I find that for my own trading style, I can pick temporary tops/bottoms this way and get some points (well, the key here is not to be greedy and have confidence in your setup)
So how are trading signals generated?
First place the indicator and open the 1m chart, it will show you the RSI levels on all time frames for that currency pair. Also add levels 20/17, 80/83 to the indicator and set them to clear red lines so you can see when a pair is taking extreme readings.
I type long:
The RSI reaches 20 or lower and I enter the long position. A better signal is when 2 or more time frames have the same low RSI reading. A stronger signal is a divergence on the chart indicating where we are from that entry point.
I go short when:
When the RSI reaches 80 or higher, I go short. A better signal is when 2 or more time frames have the same high RSI reading. A stronger signal is a divergence on the chart indicating where we are from that entry point.
Well, I believe diagrams are more valuable than words, so I'm going to share the setup including my setup for this week's trade.
Remember, don't be greedy, one or two reversal candles will do you good. Don't wait for the trend to completely reverse, because it will take more than that. Example: If you "feel" or study it from a technical perspective it's a top, open two equal sized hands and set one to TP +10 and the other to BE or something like that and you can catch a bigger move or trail your stop.
set up:
Place exclusive mtf rsi on 1 minute chart and add levels 20/17/80/83 and remove levels 30/70/50. Make the horizontal lines red and clear as they are RSI extremes.
Put the 200 WMA on the chart (this is only as a guide so that we can see how far away the price is from the moving average) - trust me, this helps, I have seen many, many situations where price tries to close the distance between that MA and not stay too far away, especially when the market is at the extremes. We need keen insight to capture clear opportunities.
don't want
- Excessive trade
- Trading news
- Friday deals
DO
- If the market moves against you, increase your position and remain confident that you can close it with a small profit or at least break even.
you will do well
I want to clarify that this is a contrarian strategy . I know many of you don't trade against the trend, but with this strategy you're not really targeting the trend movement, but more of scalping . My goal depends on the signal timeframe, the key here is to pick a precise point and exit a few points early (also depends on the timeframe). in short:
- This is a contrarian strategy
- This strategy is based on selling when the market is overbought and buying when the market is oversold
- The indicator we use is http://www.mql5.com/en/code/10972 (RSI MTF) plotted on 1 minute timeframe so you can view RSI levels in one window without having to go to every timeframe from 1 minute to 1 week timeframe
- You must take small profits and do not try to pick tops or bottoms as the market can remain overbought/oversold for long periods of time. For example, if you wish to capture a larger move and set a TP on entry when the move starts to go in your favor, use Stop Loss/Take Positioning.
- Available for all currency pairs/all timeframes
Before I show you some example trades (including ones I made using this method), let me say this:
I know a lot of people disagree with contrarian trading, but I find that for my own trading style, I can pick temporary tops/bottoms this way and get some points (well, the key here is not to be greedy and have confidence in your setup)
So how are trading signals generated?
First place the indicator and open the 1m chart, it will show you the RSI levels on all time frames for that currency pair. Also add levels 20/17, 80/83 to the indicator and set them to clear red lines so you can see when a pair is taking extreme readings.
I type long:
The RSI reaches 20 or lower and I enter the long position. A better signal is when 2 or more time frames have the same low RSI reading. A stronger signal is a divergence on the chart indicating where we are from that entry point.
I go short when:
When the RSI reaches 80 or higher, I go short. A better signal is when 2 or more time frames have the same high RSI reading. A stronger signal is a divergence on the chart indicating where we are from that entry point.
Well, I believe diagrams are more valuable than words, so I'm going to share the setup including my setup for this week's trade.
Remember, don't be greedy, one or two reversal candles will do you good. Don't wait for the trend to completely reverse, because it will take more than that. Example: If you "feel" or study it from a technical perspective it's a top, open two equal sized hands and set one to TP +10 and the other to BE or something like that and you can catch a bigger move or trail your stop.
set up:
Place exclusive mtf rsi on 1 minute chart and add levels 20/17/80/83 and remove levels 30/70/50. Make the horizontal lines red and clear as they are RSI extremes.
Put the 200 WMA on the chart (this is only as a guide so that we can see how far away the price is from the moving average) - trust me, this helps, I have seen many, many situations where price tries to close the distance between that MA and not stay too far away, especially when the market is at the extremes. We need keen insight to capture clear opportunities.
don't want
- Excessive trade
- Trading news
- Friday deals
DO
- If the market moves against you, increase your position and remain confident that you can close it with a small profit or at least break even.
you will do well
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