50 pips a day forex strategy reddit
The first chart below illustrates an RSI breakout strategy long set up. Trades are entered based on an RSI breakout off the 70 or 30 levels to go long or short respectively While this is subjective a simple rule of thumb is to bear in mind that the more number of prices bars that are trading in a range, the stronger the breakout is likely to be. Once the RSI is applied to the chart and the time frame of your choice, the first step is to look for price consolidations. For example, breakouts from a 15 minute chart usually yields 20 – 50 pips on average before prices start to pullback, while on a daily chart we can expect to see 50 – 100 pips on average depending on how strong the breakout is. However, the time frame should be of importance. For the time frame, the breakout strategy can be applied to any timeframe. We therefore make use of the 14 period RSI as we find it to be more balanced. However, traders should note that the smaller the RSI setting is, the more sensitive it is to price and the longer the time frame is, the less sensitive it is. Traders can also experiment with other RSI settings including a 7 or 21 period as well. We make use of the RSI oscillator with the default settings of 14, applied to close. This article explains how a trader can make use of the RSI as way to spot breakouts when prices enter a range. The RSI breakout strategy is one of the most popular ways the RSI is used to trade price congestion or consolidation.
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The RSI oscillator developed by Welles Wilder is used in a variety of ways, starting from spotting divergences to trading breakouts. The Relative Strength Index or RSI for short is a versatile indicator that is often used in conjunction with a trend following strategy. Share Tweet Share Email Whatsapp Print RSI Breakout Strategy