Blast RSI trading strategy is a combination of two indicators named Classy Blast and DACOPEN. The goal of this indicator is to catch the momentum of a trendy market with a better point of entry and exit. Blast RSI strategy is rsi forex trading for spotting both trend condition and current price sentiment at the same time that allows a trader to lead a more relaxing everyday trading life. Before jumping to trade I would recommend to master the basics of trend.
DACOPEN: You’ll find it at the second window. This is a trend indicator that tells you the condition of current market trend. DACOPEN is red indicates bullish and red indicates bearishness of the present market trend. Author Profile I have been actively trading stocks and currencies since April 2012. Besides trading with my personal money I am a technical analyst in a mutual fund which has Rs.
1 billion in assets under management. Notify me of follow-up comments by email. Notify me of new posts by email. The default RSI setting of 14 periods work well for swing traders. But many intraday traders find it lacking, because it produces infrequent trading signals.
Some traders deal with this problem by lowering their time-frame. Others lower the RSI period setting to get a more sensitive oscillator. However, these solutions produce RSI signals that are more unreliable. Getting infrequent trades is not always a problem for day trading. That is if the few trading setups that show up are high-quality ones. The idea is to combine the default 14-period RSI with 5-period RSI.
Our aim is to find intraday reversal setups with a high reward-to-risk ratio. The trend is determined by the moving average 200 if the price is greater than 200 ema is uptrend,f the price is less than 200 ema is downtrend. This entry was posted in Best Forex Trading Systems. Standard period settings for RSI is 14 periods, which can be applied to any time frame. RSI indicator compares the average of up and down closes for a specific period of time. RSI moving above 50 level — uptrend is confirmed, below 50 — downtrend is confirmed.
RSI peaking above 70 level — market is overbought. RSI staying above 70 level — uptrend is running strong. RSI exiting 70 level — downtrend is underway, or at least a correction down is due. Opposite for RSI falling below 30. RSI trend line breakout – early warning about chart trend line breakout. RSI diverging from price on the chart — an early warning of a possible trend change.
Let’s review each of these RSI signals below. Readings above 70 indicate an overbought market, while readings below 30 indicate an oversold market. However, once RSI advances above 70 it is not yet a signal for an immediate Selling, since RSI may stay in overbought area for a long-long time. For example, when RSI goes above 70, Forex traders would prepare to Sell, but the actual trade will take place only when RSI crosses down below 70. Opposite true for an oversold RSI: once RSI goes below 30, traders wait for the indicator to come out of an oversold area and rise above 30 before placing a Buy order. Forex traders also use 50 level of the RSI indicator, which separates buying forces from selling forces on the market.
Certain trading strategies use RSI 50 level to confirm Long and Short entries by looking at a positioning of the RSI in relation to its 50 level. RSI indicator has got another handy feature: Forex traders use RSI to draw trend lines. While RSI’s trend line stays intact, it confirms that a trend holds well. With RSI trend lines Forex traders are able to receive a much earlier warning about upcoming trend changes since RSI trend lines witness a breakout few candles earlier than chart trend lines.
RSI trend lines are especially useful on large time frames. Another way to exploit RSI is to take advantage of RSI divergence signals. When RSI approaches 70 traders watch for a bearish divergence, which occur when actual RSI readings begin to decline while prices continue climbing up. RSI Divergence suggests that a current momentum is over and traders should look to protect their profits and be ready to trade in the opposite direction. The best way to learn about any indicators is to read original works of their creators.