RSI = Blue, EMA of RSI = Red.
RSI 14, EMA 45
Long Rules:
1) RSI > EMA RSI = look for long setups
2) Resistance is broken ( a new high )
3) Price rejects (pulls away) from the previous resistance
4) RSI > EMA RSI >> 50
Short Rules:
1) RSI < EMA RSI = look for short setups
2) Support is broken ( a new low)
3) Price rejects (pulls away) from the previous support
4) RSI < EMA RSI << 50
I typically like to place a stop loss at the top of the closest resistance (if going short) and at the bottom of the closest support (if going long) and TP 1:1.
Another method is to go for partial profit at the closest support/resistance and move the stop to breakeven to catch longer trades.
3/4 trade setups in the past month on AUDUSD
FLAGS:
*the setup on the 20th of March was a working short position, but the strategy is looking long.
*the setup on the 31st of March was not validated as the RSI is not > EMA of RSI
RSI 14, EMA 45
Long Rules:
1) RSI > EMA RSI = look for long setups
2) Resistance is broken ( a new high )
3) Price rejects (pulls away) from the previous resistance
4) RSI > EMA RSI >> 50
Short Rules:
1) RSI < EMA RSI = look for short setups
2) Support is broken ( a new low)
3) Price rejects (pulls away) from the previous support
4) RSI < EMA RSI << 50
I typically like to place a stop loss at the top of the closest resistance (if going short) and at the bottom of the closest support (if going long) and TP 1:1.
Another method is to go for partial profit at the closest support/resistance and move the stop to breakeven to catch longer trades.
3/4 trade setups in the past month on AUDUSD
FLAGS:
*the setup on the 20th of March was a working short position, but the strategy is looking long.
*the setup on the 31st of March was not validated as the RSI is not > EMA of RSI