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ETHUSD 4H RSI 80-20 TRADING STRATEGY SHORT TRADERSI 80-20 TRADING STRATEGY SHORT TRADE RULES 1 - Find Highest candle in the last current 50 bars. 2 - That High candle coupled with RSI above 80 level. 3 - Wait for a new Swing HIgh but RSI is lower - DIVERGENCE. 4 - ENTER on breakout candle close below 1st candle's low. 5 - Stop Loss above new swing high. 6 - EXIT with a 1 to 3 risk reward Take Profit. Add RSI to chart Adjustments: 14 period, to 8. 70 and 30 lines, to 80 and 20. This indicator comes standard on most trading platforms. You’ll just need to make the adjustments above. Step 1 - Find the currency pair that is showing a high the last 50 candlesticks. (OR low depending on the trade) The 80-20 Trading strategy can be used for any period. This is because there are reversals of trends in every period. This can be a swing trade, day trade, or a scalping trade. As long as it follows the rules, it is a valid trade. We also have training for building a foundation before a forex strategy matters. In this step, we only need to ensure it is the low or the high of the last 50 candles. Step 2 - Using the RSI Trading Indicator: When we find 50 candle high, it needs to be coupled with RSI reading 80 or higher. (If it’s low it needs to be combined with the RSI reading 20 or lower.). We have a reading that hit the 80 line on the RSI and was the high the last 50 candles. Once we see that we had a high, the last 50 candles, and the RSI is ABOVE 80, we can move to the next step. Remember that this strategy is a reversal strategy. It is going to break the current trend and move the other direction. Step 3 - Wait for a second price (high candle) to close after the first one that we already identified. The second price high must be above the first high. Although, the RSI Trading indicator must provide a lower signal than the first. Remember that divergence can be seen by comparing price action and the movement of an indicator. If the price is making higher highs, the oscillator should also be making higher highs. If the price is making lower lows, the oscillator should also be making lower lows. If they are not, that means price and the oscillator are diverging from each other. Which is why it’s called “divergence.” Just because you see a bullish or bearish divergence, doesn’t mean you should automatically jump in with a position. We have rules in place that will capitalize on this divergence so that we can make a significant profit. Keep in mind, that this step may take time to develop. It is very important to wait for this second high because it gets you in a better trade making position. Price goes up/RSI goes down. That is the Divergence. Remember that our example is a current uptrend looking to break to the downside. If this was a 50 candle low, we would be looking at the exact opposite of this step. Step 4 - How to Enter the Trade with the RSI Trading Strategy. The way you enter a trade is very simple. You wait for the price to head in the direction of the trade and wait for a candle to close below the first candle that you identified that was previously 50 candle high. Step 5 - Once you make your entry, place a stop loss. To place your stop, bump back 1 to 3 time periods and find a reasonable, logical level to put your stop. You are looking for prior resistance or support. We placed our stop below this support area. That way if the trend continued and did not break, it could hit this level and bounce back up in our direction. Step 6 - I recommend you follow at least a 1 to 3 profit vs. risk level. This will ensure that you are maximizing your potential to get the most out of the strategy. You can adjust as you wish. Keep in mind that most successful strategies that identify breaks of a trend use a 1 to 3 profit vs. risk level.
COINBASE:ETHUSDEducation
by Tradingstrategyguides
GBPJPY 4H 15M RABBIT TRAIL CHANNEL TRADING STRATEGY LONG TRADERule #1: Draw a channel on a 1 or 4 hour chart. Rule #2 Identify If there is a Breakout on 1 hour or 4 hour chart. Rule #3 Wait for a Pull Back on a 15 minute Chart. Rule #4 After Pull Back on 15m, Make Entry. Rule #5 Find a Stop Loss Placement. Rule #6 Ride The Rabbit Trail to 50 pips with a TP Order! Rule #1: Draw a channel on a 1 hour or 4 hour chart. The first thing you need to do to get this strategy started off is you need to find a channel on a four hour or one hour chart. Remember there must be two resistance and support points to validate a channel. This strategy can use many currency pairs. Make sure you search through all of them. Many say that they “only trade EURUSD.” There is no reason for that.. Get in the charts and see for yourself! There are channels everywhere. This strategy will work with any currency pair. The opportunities are endless.. Not too bad. So basically all you are doing here is drawing parallel lines on the tops and bottoms of the price movement. This example hit a quite a few resistance and support levels which means that when it breaks this channel it has the potential to make a huge move! Rule #2 Identify If there is a Breakout on a 1 hour chart. The way you find the trade is to find a breakout of the channel that you drew on your chart.. In a perfect world the support and resistance levels will hold on forever.. But the world isn’t perfect.. So that’s why we have what is called a breakout. This breakout happened on the top of the channel. So that means you will BUY. If the breakout happens on the bottom of the channel then you will SELL. Great! We have breakout candle let’s get in the trade and follow the rabbit trail to pip glory! Rule #3 Wait for a Pull Back on a 15 minute Chart. Why wait? Because the market is money grabbing machine, and they want your hard earned cash! You wait because sometimes the market does a “head fake” and turns against you. So if you would have got in this trade right when it broke out of the channel you would soon have got stopped out. That is why it is so important to Wait for it to pull back. This is where many people struggle. They see that it broke out so they want to click BUY or SELL right now!!! Think about the sayings you have heard since you were a child, “Patience is a Virtue,” Or “Good things in life take Time” Just be patient and wait… This trade would not have burned you, but countless other trades would have! Think about the pull back as the candle that closes towards the channel. So if the pull back is above the channel you are looking for a bearish (red) candle. If the pull back is below the channel you are looking for a bullish (green) candle. *We only need one of these pull back candles on a 15 minute chart. Once this happens move on to the next step. Rule #4 After Pull Back, Make Entry. We are getting so close to getting on our rabbit trail to make some serious pips! Our lines are drawn, we identified the breakout, and waited for the pull back. It is now time to make our trade. The criteria to make an entry after a pull back on a 15 minute chart to enter a trade is that there must be two 15-minute candles that support our trade. If it is a BUY trade we want to see TWO bullish (up) candles after the pull back. If it is a SELL trade we want to see TWO bearish (down) candles after the pull back. Enter after the two bullish 15 minute candlesticks close. So again, we WAIT for a pull back candle to close and then we need two BULLISH (green) candles to close to many an entry. Rule #5 Stop Loss Placement This is probably one of the most important rules of the strategy. You always need to place a stop loss somewhere for a reason. If you are throwing in stop losses 5 to 10 pips from your entry order just because someone you read that somewhere, then you are without a doubt treading some dangerous waters. In a Buy The stop loss will be placed in the channel below the last support point. In a SELL The stop loss will be placed in the channel above the last resistance point. That way if it does come back in the Channel it will hit the support level and end up going back up in a bullish movement. Rule #6 Ride The Rabbit Trail to 50 pips! The last thing you need to do is know when to exit the trade. This strategy goes for a 50 pip target. So when you make your entry, you calculate 50 pips take profit mark and place it. The rabbit trail may be 2 hours, or could take as long as two days. You have your target so really you have nothing else to do but sit back and watch your trade make you some money! Stay in the trade and remember your rules. You are going for a 50 pip breakout trade!
Education
by Tradingstrategyguides
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