RSI/Middle Combo
Posted: Fri Sep 22, 2006 1:17 pm
I am primarily a swing trader and I've been working on this strategy which pairs the middle with the RSI (value 2) on intervals of 60 mins and up. I have mainly been applying it to forex (GBPUSD for volatility) and it has been yielding decent results. It works on all timeframes but you have to take into account comm and slippage.
All that aside I am still working on the exit strategy and I was hoping to get some input on what you guys see that I may be overlooking. I am primarily looking for help on the exit strategy.
How it works:
You wait for the RSI(2) to go above 90 or below 10 the bar MUST be CLOSED to get the reading. If one of those conditions are met; if above 90then you look for an opening above the middle and go short when it crosses the middle and if below 10 then the open must be below the middle and cross going up for a long position.
To exit the position, I look for one of 3 things. If you are short you look for a higher high, if long look for a lower low, and last you look for an opposite entry signal from the one you got in on.
Some notes:
I have found if you don't get the signal in 3 periods from the RSI leaving the +90 or -10 area then the signal is obsolete. Also note I place my initial stops at the nearest prior resistance level and move it down to the prior highs or lows as the trade goes in my favor. You will get stopped out for a loss on occasion if you are looking to hit the big one, which i find is definitely worth waiting on. It will also get you when the market is in a very strong trend.
Hope this can help you too.
All that aside I am still working on the exit strategy and I was hoping to get some input on what you guys see that I may be overlooking. I am primarily looking for help on the exit strategy.
How it works:
You wait for the RSI(2) to go above 90 or below 10 the bar MUST be CLOSED to get the reading. If one of those conditions are met; if above 90then you look for an opening above the middle and go short when it crosses the middle and if below 10 then the open must be below the middle and cross going up for a long position.
To exit the position, I look for one of 3 things. If you are short you look for a higher high, if long look for a lower low, and last you look for an opposite entry signal from the one you got in on.
Some notes:
I have found if you don't get the signal in 3 periods from the RSI leaving the +90 or -10 area then the signal is obsolete. Also note I place my initial stops at the nearest prior resistance level and move it down to the prior highs or lows as the trade goes in my favor. You will get stopped out for a loss on occasion if you are looking to hit the big one, which i find is definitely worth waiting on. It will also get you when the market is in a very strong trend.
Hope this can help you too.
Hi Jh - do you have TS code for this?