Rsi strategy for intraday trading


Just recently, US non-farm payrolls came out worse than expected but the market barely budged. Why? Because there simply wasn 8767 t enough sellers to take the market lower. Markets take the line of least resistance, so when the bad news had been fully absorbed the market ended up going higher.

Intraday Profit generator using RSI and ADX for Amibroker AFL

These levels are probably the most important concepts in technical analysis. They are a core of most professional day trading strategies out there.
How do I trade with it?
Let me introduce you to the “Role Reversal”. Let’s see how can you use it in your every day’s trading.
Role Reversal is a simple and powerful idea of support becoming a resistance (in the downtrend) and the resistance becoming a support (in the uptrend).
Let see how this plays out in the uptrend.
Once the price is making higher highs and higher lows we call it uptrend. Technical trader must assume the price is going to go up forever and only long trades should be considered. Once the uptrend is defined, the lowest strategy to trade is – buy on pullbacks.

Intraday Live Trading Automatic Buy Sell Signal Charting

The above chart shows the first positive signal in detail, the fast MA crossed quickly down over the slow MA and the trend MA, generating the signal.
Notice how the price moved quickly away from the trend MA and stayed below it signifying a strong trend.

If you are looking to buy the market after the price made fresh high, you would be waiting for the price to retrace towards role reversal, Fibonacci Level or moving average. As you are pretty confident, the price is moving higher, you don’t know how far the price will pullback.

Looking back, the Nikkei did end up revisiting those lows but at the time of the disaster, there were fast profits available for intraday traders reacting to events.

A Trader would now:
Enter long trade after two consecutive RED candles are completed and the Stochastic is above 75 mark
Enter short trade after two consecutive GREEN candles are completed and the Stochastic is below 85 mark.

As in the story I told above, trading based on hearsay or some popular narrative will lead you to almost certain doom!
The value of using a tried and tested trading technique is immense, and will save you from loosing your hard earned savings.

If the market is in downtrend, the price will punch through supports making new lower lows. The broken support becomes new resistance and offers opportunity for short positions.

This is the essence of how I trade and I maintain a number of short-term and long-term trading systems  which I use to manage my portfolio. These strategies have been tested on historical data and work during different types of market conditions. As well as this, I keep a separate pot of capital available to capitalise on short-term, intraday opportunities when they arise.

Setup #7 on the chart
Similar to setup #6, price, after a few days of rally, it came back up to an overbought stochastics zone ( above 75) and is now trading around a major resistance zone. A trader will be marking this area as bearish and switching to intraday charts to seek a bearish reversal price pattern.


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