The Risi-moku Trade

The Risi-Moku Trade The Risi-Moku trade is a high-probability entry method using the RSI, Stochastic Oscillator, and the Ichimoku Cloud. Settings 1. Stochastic Oscillator set to 70, 10, 10 (with overbought at 65, oversold at 35). 2. RSI set to 28. Draw a horizontal line at the 50 mark on the RSI. 3. Ichimoku Cloud set to 18, 52, 104. A buy trade

A sell trade

Buy Trade Type #1 1. Stochastic is oversold (below 35). 2. RSI crosses above the 50 line. 3. Entry on the close of the candle. 4. Stop-loss below recent lows. 5. Profit target #1 at the bottom of the cloud. 6. Profit target #2 at the top of the cloud.

Additional thoughts about buy trades I love buy trades that come soon after positive RSI divergence. Positive divergence is when price is making lower lows, but the RSI is making higher lows. This is an early warning sign that the market is about to turn upward. On these divergence trades, you might consider expanding your profit target to #2.

Sell Trade Type #1 1. Stochastic is overbought (above 65). 2. RSI crosses below the 50 line. 3. Entry on the close of the candle. 4. Stop-loss above recent highs. 5. Profit target #1 at the top of the cloud. 6. Profit target #2 at the bottom of the cloud.

Additional thoughts about buy trades

I love buy trades that come soon after positive RSI divergence. Positive divergence is when price is making lower lows, but the RSI is making higher lows. This is an early warning sign that the market is about to turn upward.

Buy Trade Type #2 1. RSI crosses below the 30 line. 3. Stochastic has a bullish cross. 4. Entry on close of next candle. 4. Stop-loss below recent lows (or lower). 5. Profit target #1 at the bottom of the cloud. 6. Profit target #2 at the top of the cloud.

Sell Trade Type #2 1. RSI crosses above the 70 line. 2. Stochastic has a bearish cross. 3. Candle closes and we sell. 4. Stop-loss above recent highs (or higher). 5. Profit target #1 at the top of the cloud. 6. Profit target #2 at the bottom of the cloud.