RSI(14): The Way to Success...

In earlier posts I've shown a strategy of using the RSI(14) as a trigger to enter trades when it reaches extremes of 30/70. What I didn't realize until reading an old article by J. Welles Wilder, the creator of the RSI indicator, was that it was developed by him as a divergence indication of price and strength of RSI signal. I have been trading this signal with 5-min charts on EUR/JPY and GBP/JPY and it has been incredible. The idea is that you have to combine the divergent RSI with another solid support or resistance level such as monthly/weekly/daily high/low, daily pivot, S/R pivots, round number or fib level.

Here are a couple of examples:

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March 30, 2008 at 9:12:00 PM PDT
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