Strategy Clarification
I wanted to clarify how the RSI(14) is used. Start by applying the RSI(14) indicator to both the 15-min and 5-min charts. Also apply a 56ema moving average indicator to the 15-min chart. The 56ema gives a close approximation of the 14ema from the hourly chart.
Here's how to use the RSI. You use it only as an alert. It's not a blindly mechanical indicator. Price needs to be at, approaching, or in close proximity to another source of support or resistance such as a daily pivot, a significant fib level, a round number, the 56ema on the 15-min chart, etc., in addition to the RSI(14) being overbought/oversold. A double bottom candle formation is helpful as are any of the typical candle formation for reversal.
Check out the following post to see how well this works. I have my trade notated on the image. How many other entry opportunities can you spot? There are at least two others for exceptional short trades. I was unable to take the other opportunities as I was not at the screens yet.
Another point I can not stress enough the importance of is: Take your time and wait for a very good opportunity for entry. If you missed the last two or three from earlier in the day's session as I did, don't sweat it. There's always another trade around the corner. Sometimes there are no opportunities to enter. That is perfectly acceptable. When I was beginning to trade I thought I needed to make trades every day no matter what. How else was I to make money if I wasn't in the market? That way of thinking cost me a lot of money. It's failed logic. It was not until I learned the patience and discipline to wait for the few entries of choice that return the cash way more often than not that I started to rake in the money. Patience and discipline are your two strongest allies in the market place, bar none. I'm convinced that if a day trader fails to learn discipline and patience, they are doomed to failure. That is the secret to becoming a successful trader.
Here's how to use the RSI. You use it only as an alert. It's not a blindly mechanical indicator. Price needs to be at, approaching, or in close proximity to another source of support or resistance such as a daily pivot, a significant fib level, a round number, the 56ema on the 15-min chart, etc., in addition to the RSI(14) being overbought/oversold. A double bottom candle formation is helpful as are any of the typical candle formation for reversal.
Check out the following post to see how well this works. I have my trade notated on the image. How many other entry opportunities can you spot? There are at least two others for exceptional short trades. I was unable to take the other opportunities as I was not at the screens yet.
Another point I can not stress enough the importance of is: Take your time and wait for a very good opportunity for entry. If you missed the last two or three from earlier in the day's session as I did, don't sweat it. There's always another trade around the corner. Sometimes there are no opportunities to enter. That is perfectly acceptable. When I was beginning to trade I thought I needed to make trades every day no matter what. How else was I to make money if I wasn't in the market? That way of thinking cost me a lot of money. It's failed logic. It was not until I learned the patience and discipline to wait for the few entries of choice that return the cash way more often than not that I started to rake in the money. Patience and discipline are your two strongest allies in the market place, bar none. I'm convinced that if a day trader fails to learn discipline and patience, they are doomed to failure. That is the secret to becoming a successful trader.
Comments