Although no trading system can solely rely on RSI indicator, using it in combination with other tools and proper technical analysis can bring a new edge to your Forex trading.
Currency pair: Any.
Time frame: Any.
Indicator: RSI (14) with levels at 70 and 30.
Entry rules: Buy when RSI has crossed below 30, formed a bottom, and then crossed back up through 30.
Entry rules: Sell when RSI has crossed above 70, formed a peak, and then crossed back down through 70.
Exit rules: not set.
Advantages: RSI is a very good indicator to refer for confirmation for any entry in any simple or complex trading system. For current trading method it advices well on entries, but opportunities occur not that often.
Disadvantages: monitoring is needed, still false signals take place. Strategy is suggested to be used in combination with other ones.
Hi everyone i will share my trading system also everyone can come in this topic to discuss and make it better !Here my trading system with indicators :TMA ( Triangular moving average )PTL AlertBull Eye ForecasterADRSignalStopAnd this is my rules : TF using H1* Long entry :When candle upper Bulleye ForcasterPLT Alert make Green Candle and DotSignalStop change into Aqua color* Short entry :When candle below Bulleye ForecasterPTL Alert make Violet Candle and DotSignalStop change into Magenta color* Stoploss and TPI use stoploss when SignalStop alert dot Aqua and Magenta appear below and upper Candle when i take entryI TP using ADR High and Low or Candle touch in TMA bands or opposite entry
The double bottom chart pattern is a bullish reversal price action chart pattern that develops in a down trend and is recognized by the appearance of a low, a rally, and then price revisiting the same zone of the previous bottom. It is much like it’s double top chart reversal pattern cousin except we are doing everything in the reverse. A double top looks for a reversal after an uptrend. Since we are using price action as the main building block of this swing trading strategy, you don’t have to rely on the lagging nature of any technical indicator. Even the entry is done through a breach of the potential resistance level that shows up after the first bottom of the double bottom pattern is put into place. This reversal pattern can be used to show a reversal in the man trend and as an entry pattern for a trade in the direction of the trend and in this case, we look to go long. In the case of the latter, we are trading in the direction of the major trend after the shorter term trend ends with the double bottom pattern. There can be many ways to trade a double bottom chart pattern strategy but like any trading, the important of risk management can never be ignored. Key Elements of The Double Bottom Chart Pattern After a long run of a downtrend, the formation of the double bottom can signify the potential for a complete reversal of the trend. Getting involved at the beginning of an uptrend (picking the bottom) can add to your bottom line in amounts that you can’t imagine. That is best case scenario. The second bottom does not have to come directly to the same price point of the first low that is put in. In fact, a pure double bottom pattern is rare and you will often see price come above the zone or even poke below and then rally. That is a trade setup by itself where traders get trapped short and are forced to cover their position as the uptrend gets underway. The peak that shows up as price puts in the first bottom, starts to rally and then turns back down again is called resistance. The violation of that resistance is what confirms the double bottom. I will repeat that….. A double bottom is not confirmed until the resistance level that forms between to the two lows is violated. Depending on the size of the rally after the first part of the double bottom is put in, waiting for the resistance level to break can end up leaving the trader on the sidelines as a huge move gets underway. You will want to learn other continuation chart patterns such as flags that can show that the double bottom is a likely chart pattern so you can find a trade entry before the resistance is broken. What Is The Swing Trading Strategy We are looking to take advantage of this chart pattern by allowing it to alert us to a possible change in trend. We can even use it to get involved in the longer term trend as the short term downtrend exhausts itself. The market is in a downtrend which can be determined by price action, a technical analysis indicator, or by a simple glance at the chart. We need a downtrend in place. Price bottoms here with a solid rejection and after a quick test of support (not needed), price begins to rally The high is put in and for the double bottom to be confirmed, you will need a break of this level. This is a weekly chart and this peak over a 1000 pips from lows Price moves back down and tests the zone of the previous bottom. We need this zone to hold to have a chance at using our trading strategy to go long Price begins to rally and although not shown on this chart, price retraces to the .786 Fibonacci level (also the same level as that cluster of price above our number 4) and then goes onto a 7000 pip run before stumbling into a long term consolidation. Stops and Price Targets You need to use a stop loss and you can place it below the double bottom pattern as an easy choice. Keep in mind that if you use another entry besides the break of confirmation resistance, a breach of lows does not make this double bottom invalid. You can use an ATR – average true range – stop and that is my preferred method of placing stops regardless of the pattern I am using. One point – the only time I don’t use an ATR stop is when trading a reversal as a violation of the high or low of the retrace or rally would invalidate my trade. Price targets can be set via a measured move in line with the chart pattern. The measured move target is simply the height of the pattern projected upwards which will give you a 1:1 reward risk ratio. The Fibonacci targets simply use extensions which are price projections over 100%. You can also trail your stop to lock in profits with various methods. Alternate Trade Entry You know that the low to resistance area is over 1000 pips and it can be frustrating for a trader to see price move without them. We can use another technical analysis tool, the trend-line, to help us get into this trade Draw a down trend line and enter when price breaks the line. This is a front run of the confirmation entry and remember that you will often see price break a trend line and then retrace to test the trend line. Ensure you have the psychological willpower to sit through the retrace. Trust in the process and your calculated stop loss. Some traders will for watch for a bullish reversal candlestick formation and we do get one on the formation of the second bottom. I would call that a failure test of the lows of a consolidation which is a bullish signal.
One example of a simple long term trend following system is the ‘Golden Cross’. This is the most popular and famous bullish moving average crossover entry signal along with its inverse ‘Death Cross’ bearish exit or short selling signal. The Golden Cross happens when the 50 day simple moving average crosses over the 200 day simple moving average crossover and stays above until the end of the day. This signal has you go long when the 50 day simple moving averages closes above the 200 day simple moving average and takes you back to cash when the 50 day SMA closes back under the 200 day SMA signaling the Death Cross. This strategy is best compared to buy and hold investing using the SPY ETF for the backtest and presents a simple alternate that creates more returns than buy and hold investing by going to cash during extended bear markets and crashes. This is a very long term strategy and closer to trend following or investing than swing trading or day trading. Historically the cash signal decreases the drawdown in capital dramatically. This moving average strategy stays long in bull markets but not during sustained downtrends. It also filters out much of the noise in price action and does not create many false signals. The weakness is that it is slow to react to quick market crashes. This is the backtest data in $SPY from 1993-2019 and from $QQQ from 1999-2019. The $SPY golden crossover signal average return was +19.95% per trade, total return over the full backtest since 1993 was +645.30% versus the buy and hold return of 567.47%. The big out performance started after buy and hold took the substantial draw down in 2008 that the crossover avoided. It also outperformed coming out of the 2002 sell off. Risk management is one of the biggest strengths of this signal.