The RSI is a quality indicator for trend. I believe this and i am going to explain another profitable way of combining it with the Bollinger Band for good result.
INDICATORS: Relative Strength Index, Bollinger Band (all default Settings)
TIME FRAME: 4HR AND 30MIN (You could also use 30min and 5min)
Its very simple; apply the bollinger band to all time frames but its needed in 30min timeframe. In the 4hr apply the RSI. When RSI is above 50, its uptrend and below 50 is down trend. Then move to 30min for entries.
While in the 30min time frame, in an uptrend, wait for price to close below the lower band of the Bollinger, then a close above the lower band will make your entry for LONG
While in the 30min time frame, in a downtrend, wait for price to close above the upper band of the Bollinger, then a close below the upper band will make your entry for SHORT
Enjoy
2 comments:
This is it, thank you James
amirul zaki: james i've been reading ur post on ur blog about RSI trend.it's a very useful information!!thank you for sharing...have a question to ask...let say the price now is stuck at the centre of the band and the RSI on 4 hour timeframe is still under 50(conforms the downtrend)....is this a sign that the price will go further down to support lines??
James: u must back test and see how it works
James: define stoploss and takeprofit and remain in it
James: even when u loss
James: bcos its more winning
James: then over time u will have netprofit
amirul zaki: okay
amirul zaki: i'll follow ur advice then
amirul zaki: thanks
James: welcome
amirul zaki: hope to hear more from u james
amirul zaki: it's good stuff
amirul zaki is typing...
amirul zaki: may god bless you
James: sure
James: u too
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