chrystael

LECTURE ON DOUBLE TOP AND DOUBLE BOTTOMS WITH RSI DIVERGENCE

FX:AUDUSD   Australian Dollar/U.S. Dollar
441 6 3
hello traders

i wana make it known and clear especially to those who asked me how to trade double tops and bottoms. this is with respect to the trade i made to my memebers

in this setup, look clearly, you will see points A, B and C on the chart and their respective RSI chart points too

Point A. look at the price chart. the prices there close one above another in an oblique fashion. also look its RSI point A while you will see that the chart there is also in oblique but in opposite as the price chart. did you see that?

for point A, this is a clear double bottom or DB             which should have been traded if not.

Point B. look at the price chart. the prices there close one above another in an oblique fashion. also look at its RSI point B while you see the chart there is also in an oblique and opposite direction as the price chart. this is also a double top, but i would not trade it because, the first touch was not in oversold condition with respect to its RSI chart. did you see that?

also this point B is where i give my member a trade today on completion of gartley on two positions - targets 1 and 2. but did not trade a third position since here there was no clear RSI divergence.

Point C. look at the price chart. the prices there close one above another in an oblique fashion. also look at its RSI point C while you see the chart there is also in an oblique but not in an opposite direction as the price chart. In this case, it is a double bottom as the price chart terminates on a support, but i will not trade it as there is no change in its RSI chart. it doesnt mean whether the market will still go or not, but you need some level of confirmation before you push the button.

the difference in the price chart and RSI chart component on the bottom or top is known as RSI divergence if it diverged to the opposite side as in points A and B and not C.

hope this helps alot.

if you like what you see here please click the button.

comments are welcome for any question or contribution.

Related Ideas

dojitrader
2 years ago
I hope you do not mind a dissenting opinion and perhaps we can take a poll of other traders, too ?
(In many traders eyes I'm only expressing an alternate opinion or just a difference of semantics but I think
there is an important distinction between the two trade set ups)
It seems to my research and experience, the examples you are showing/describing are not double
tops/bottom, BUT, simple rsi - price action divergence. Why ? Doesn't a true double top/bottom
require the symmetry of: #1 a minimum retracement of 23.6 to .382% #2 Retest of equal price #3 There
is also RSI divergence. Thus, the difference then between the set up you describe and a double top/bottom are:
The dbl top/btm give you precise entry, stops and targets where simple RSI divergence you're never
quite sure where to enter or place stops until well after the results are seen especially
since divergence can go on and on and on and . . . on . . . on . . .
{{check out the 4hr Loonie chart for a great example}}
plus divergence alone offers you no targets other than support/resistance.
This chart offers a "classic" example" from this morning. Classic in that it was a - No Pain Trade - which
are always rare but happily accepted. What's even better about this set up is that it is a FAILED dbl btm.
Price never rose above the measured move, and yet, it was profitable. Not many pips but pips in your pocket
none the less. R and R a little short of 2:1 my preferred ideal.

Well, those are my thoughts. Hopefully they've been expressed with an understandable degree of clarity.
Now for the poll ~~~ Who else thinks there's a difference between dbl tops/btms and RSI/price action
divergence OR Am I just being anal with opinion/semantics ??

As always wishing you LOTS of pips in your pocket for 2015 and beyond !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
snapshot
Reply
chrystael dojitrader
2 years ago
From your chart. It is basically a retest of support from which a trade can be intiated especially used in binary options trading and not a double bottom in this context i was refering to. You dont need up to the kind of 23.8 or 32.8% retracement as you said, because should you have those, then the next move mostly might not shoot for a distance and will come back. But when you have a littke pull back to retest the previous support or resistant basically on a good supoot or resistant line with a rsi divergence with the initial price going oversold or overbought then it is in this context. I could show many examples and will try to do so if time permits.
Also in about true or real DB or DT of 5, 3 should play well confidently. I have done this wth experience and seen it bro.

Mind it, a DB or DT is individually percieved as at different time frame it could be something else. But from my experience and back testing, you should try at 3 time frames and if you see same thing then it gives you an edge.

All the same, a rebounce on the same support or resistant line is different from the DB or DT in thus context.

Thanks
Reply
chrystael
2 years ago
Finally, DB or DT should fulfill these conditions:

Be found at where you feel market should reverse with good reasons for that, be it good support or resistant or trend line or news release or harmonics or fibs confluence or completion of a count or pattern, or good retracement or extension, etc.

Be found with rsi divergence on the opposite side of the market movement.

Be found when rsi is either overbought or oversold and the divergence drawn from and overbought or oversold point.

Be found at points where the retest is very small might not or mostly not up to any retracement values from the time frame you are seeing it just like in my example and not in dojitrader example.

Be found at points where you can see the DB or DT at 3 different time frames to confirm it or atleast 2 different time frames if you saw it on 5 minutes time frame with 3 minutes and 1 minutes also being considered and they show the DB and DT with....i repeat with RSI divergence correctly.

Thanks for comments and learning.

These are the rules. Nevertherless if seen on higher time frame, then they could amount up to a retracement value in a smaller time frame but confirmations should be made.

God luck people
Reply
dojitrader chrystael
2 years ago
My apologies, but, I am not smart enough to understand your reply.
Perhaps, if you would be so kind to show a chart with
entries - stops and targets I would get a better idea of what
you see as the difference or similarity of your oblique divergence
or my idea of retracement first. I think I do understand that you
see any test of support/resistance as a dble top/btm ?
Thanks for all your time and thought in answering my comments !!!!!!
Reply
chrystael dojitrader
2 years ago
like i said i will if time permits for clarity
Reply
chrystael chrystael
2 years ago
but you could check my summary of trades for members and see. hope this explains it.

thanks man
Reply
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