You can make trading with
stochastic-RSI in intraday or swing.
Time frame is 15 min or higher.
Currency pairs: majors for intraday,
any for swing trading.
First find the trend with Exponential
moving averages:
15 period EMA close and 40 period EMA
close.
Stochastic RSI Oscillator is an is a
mixture of the Stochastic and the RSI indicator, Over-bought zone
above 90 level. oversold zone below 10 level.
In the picture below we see this simple
template for trading.
Trading Rules for trading with
Stochastic-RSI in trend following
Buy
15 EMA crosses above the 40 EMA, the
trend is up.
Stochastic-RSI Oscillator goes in to
oversold zone (aggressive).
Conservative mode wait that the
Stochastic-RSI oscillator turns above the oversold zone.
Sell
15 EMA crosses below the 40 EMA, the
trend is down.
Stochastic-RSI Oscillator goes in to
over-bought zone (aggressive).
Conservative mode wait that the
Stochastic-RSI oscillator turns below the over-bought zone.
Place initial stop loss 8-20 pips max
(depends by currency pair) below/above the entry bar.
The target that can be used, will be
twice the stop loss. target ratio 1:2 stop loss. Example if the stop
loss is 12 pips, target profit could be 24 pips. Once you have 12
pips in profits, stop is moved to break even.
Another method for exit is with
trailing stop just trail the stop below/above the bars.
This strategy is very simple but if you
want increase the profitability you needs decrese the profit target
ratio at the 1.15. example if the stop loss is15 pips the profit
target is 17 pips.
I recommend make trading with the
conservative way.
Example of conservative mode
The above chart identifies where the
trend has changed to an up trend. Once that happens, we then look for
the oscillator value to move below 20 and then as it is rising, we
enter the market.
The red arrows all show potential
places where trades could have been initiated.
Example aggressive mode
In the chart above we have 7 trades
with 5 wins as two losses.
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