Rsi And 20 Sma

1 min RSI/20 SMA EUR/USD Relative Strength Index – Oscillator What is an oscillator? Repetitive variation, typically over the mean of a defined range. Provides an indication of price being overbought or oversold as compared to the middle of the range. RSI oscillates, that is, revolves, over a fixed range from 0 to 100. 70 is typically the “top” and when RSI goes over 70, it is generally thought to be overbought. 30 is typically the “bottom” and when RSI goes below 30 it is generally thought to be oversold. 1 Minute RSI Trading 1 minute charts RSI setting 14. RSI Levels: 70, 50 30 Profit target: 2 to 3 pips 70/30 Lines: Buy when price is overbought. Market is moving up. Profit target is 3 pips. Sell when price is oversold, RSI goes below 30. Profit target is 3 pips. 20 Simple Moving Average Buy when price crosses from below 20 SMA to above 20 SMA and produces 2 bullish bars. Sell when price crosses from above 20 SMA to below 20 SMA and produces 2 bearish bars. If the 20 Simple Moving Average is showing an obvious direction from left to right, you can filter the trades you take by only taking trades in that direction. If the 20 simple moving average is not showing an obvious direction, but is ranging up and down, but clearing an adequate tradeable space, take all the buys and sells as prices moves over the line. 50 Line: The bonus level. If RSI crosses 50 at the same time price moves over the 20 SMA, this adds credibility to the trade setup. The Secret Weapon This may be all it has in common with the Hopper. Anytime you find sideways or ranging market activity, draw horizontal support/resistance lines. When we get price stuck in between an upper line and a lower line, place entry orders to buy and sell above and below the range. Use a 6 pips or more profit target.

Alternate Secret Weapon Strategy Take two trades at the point of entry. Use 5 pip profit target on one, and 15 pip profit target on the other. When the first position closes with +5 pips, move to break even on the second position. It will probably close at break-even, but if it goes quickly to 15 pips, it pads the account for losses. Stop-Loss 1. Stop out when price goes back to the 20 SMA against me. Sooner if I can. I may decide not to take a trade entry when price is distant from the 20 SMA, as that increases the stop loss placement. 2. Hold trades open longer if you have well defined ranges with support/resistance lines. Designate the line which ends the trade in loss. I could be willing to hold one that gets away from me for a bit longer if it looks like price is in a definable range and I can see it potentially working its way back to my break-even point. 3. Designate a maximum pip loss such as -10 or -12. Tips and Tricks: Economic Events: Avoid trading the 1 minute charts during known economic report releases. If loss occurs during the first 2 hours of my trading session, I get out as quick as possible. I will make more pips in and out as the market moves, than I will lose if I cut a loss early. If loss occurs during the last hour of the session (hour-3 in the active trading session), then I might let the loss run against me a bit. The bulk of the volatility is over, and I should know by now if we are in a trending market or a ranging market. If price has climbed significantly higher or fallen to a significantly lower level, that would be a “trending” market. If price isn’t too far from where it started at the beginning of the trading session, then that would be a ranging market. If I am in trending market, I better not be holding a position against the trend in the third hour. If we are not in a trending market, I give it some time to range around and see if price will come back in my direction. Getting Out Of Trouble Add a second position if price is against me and at the top/bottome of a range. The first position should be between -20 and -30 pips. Do not add a second position if my negative trade is less than -20. Is adding a second position “adding to a loser?” or is it doubling-down to cut the negative space in half to get back to break even? If you add the second position too soon, (i.e. before -20 pips) you are simply adding to a loser. If it runs far enough against you and the range is well established, you could split the negative space as the market comes back in your favor. Wait for -20 or -30 before adding the second position. Do not let the second position go more than -10 against me. Now we are working to get back to break even.

On a good day, there is no work to get back to break even. We take numerous trades up and down. On a bad day, we have one run against us and we have to work to get back to break even. We don’t always get back, but sometimes we do. Having trouble getting started: Zoom out your chart so it’s small and find obvious places where you can place horizontal sup/res lines. Zoom back in and see how the spaces look. Sometimes this helps you start defining trading ranges. Having trouble with volatility: You might avoid the first hour of the active trading session, and trade when the market resumes calm back-and-forth motions over the 20 simple moving average. Trade on 30 Second Charts RSI settings: 9 Levels: 70, 50, 30 A calm rangey market is preferable for this strategy. Support/Resistance horizontal lines are key to trading in the 30-second environment. Start putting horizontal lines on the chart, and watch price work through the lines. It becomes obvious which lines are working well with price, as price ranges in these horizontal channels.

Now you have “bands” where price ranges around. You can look for buys and sells from top to bottom all day long, preferably with the help of RSI and a 20 SMA.

I always use entry orders for trade placement on the 30 second charts. Determine ahead of time where you want to be in the trade and have an entry order waiting. Profit target on the 30 second chart is 1 to 3 pips. Be quick to take 1 pip off the ultra-short term charts. Risk:Reward Ratio: Really?! You cannot justify your losses by potential wins. Take profit as often as possible. 1 pip over and over stacks up faster than anything else I have ever traded.