Today, I will introduce the RSI indicator advanced trading strategy. It can increase a huge win rate up to nearly 90% in Fixed Time Trade, which is built based on the methods of RSI masters. If you can learn and use it properly, making big profits is within your hands.
- 1 The core foundation of advanced RSI trading strategy
- 2 How to trade with the advanced RSI strategy
- 3 Summary
The core foundation of advanced RSI trading strategy
The secret to the success of this advanced strategy is the RSI indicator.
However, the RSI indicator won’t work if you don’t set it up properly. If the trade is short in the 1-minute timeframe, you need to adjust the parameters accordingly. To trade Fixed Time effectively at 60 seconds, I will use 9 periods of the RSI indicator.
That will show us more sensitivity of the RSI in each price movement. In addition to setting the RSI, you should also pay attention to the overbought zone above 70 and the oversold zone below 30. Then we will receive more accurate trading signals.
How to trade with the advanced RSI strategy
When the parameter changes for 9 periods, the RSI reacts to the price more quickly. It helps us to quickly grasp new opportunities that arise.
Step 1: Identify the overbought and oversold zones of the RSI
Because this is a reversal trading strategy, we need to observe the RSI to find a reversal signal as follows.
If the RSI line is below 30, the market is in the oversold zone and the price is likely to rise.
If the RSI line is above 70, the market is in the overbought zone and the price is likely to fall.
In the example below, you can see our 1-minute EUR/USD chart satisfying the first condition.
Step 2: Determine the low or high of nine 1-minute candlesticksticks
Next, you need to determine what state the current candlestick’s closing price is in. Is the candlestick closing below the oversold zone and must be lower than the previous 9 candlesticks. Conversely, if the current candlestick closes above the overbought zone, is it higher than the previous 9 candlesticks?
Then mark them on the candlestick chart for easy tracking. When counting candlesticks, you should start with 1 at the current candlestick. Then count next from right to left on the chart.
To move on to the next step, we need the previous 9 candlesticks lower than the current candlestick and the price is in the oversold zone at the same time. Now just add one more condition and you will have a standard trade with RSI that has a win rate of almost 90%.
Step 3: Look for an entry point at the RSI divergence
When trading reversals, the more conditions you need to satisfy before entering the trade, the higher your winning rate will be.
Continuing to observe the price action of the example, we will see that the price is still falling. At the same time, the RSI is moving higher in the opposite direction of the price. If the price moves in one direction and the RSI moves in the opposite direction, it means a divergence is occurring. In the example, this is a bullish divergence – a very potential reversal signal.
Step 4: Trading formula of the advanced RSI strategy
The first thing you need to do is to mark on the chart the low or high close of the 9th candlestick.
If the price breaks through the low of the 9th candlestick and the RSI shows a bullish divergence at the same time, then open an UP order.
If the price penetrates the highest price of the 9th candlestick and the RSI shows a bearish divergence at the same time, open a DOWN order.
After deciding the investment amount and choosing 1 minute is the time limit to close the order, take a break and wait 1 minute before you get the profit you expect.
No matter how high the winning rate of a strategy is, if you apply it the wrong way, it is still a loss. Therefore, you need to practice on the Olymp Trade Demo account to master the advanced RSI trading strategy before diving into real trading. In the end, profits will also come to those who know how to be disciplined in trading. Good luck.
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