I have never been fan of RSI, however after 1,5 years of trading, I decided to give it a shot and find out, whether this famous indicator could be useful for me or not.
First of all I was certain, that I will be using this indicator only on higher time frames, I was testing it on 15 minutes TF, but for me, there was just too much "noise" and I found out, that RSI on 1hr is best setup for me. And I found one pattern, that is constantly repeating in TRENDING market and I found this pattern very, very useful.
I still think, that best trading advice is "trend is your friend" and I remember when I was always trying to catch bottoms or tops and I always got stopped out and miss continuation of dominant trend. This pattern on RSI is good indication, that trend isn´t finished yet and now you have a chance to get on the "train".
This pattern is simple : UPTREND CYCLE: bearish divergence -> bullish divergence -> new swing high -> repeat.
DOWNTREND CYCLE: bullish divergence -> bearish divergence -> new swing low -> repeat
Of course, you just can´t trade based on this pattern, I am using it with eliott waves, so if I see finished correction or 5-wave reversal and I am also seeing that trend divergence, I will always bet on trend continuation. You also can´t predict any take profit with this pattern, but as a trend follower, it works perfectly.
First of all I was certain, that I will be using this indicator only on higher time frames, I was testing it on 15 minutes TF, but for me, there was just too much "noise" and I found out, that RSI on 1hr is best setup for me. And I found one pattern, that is constantly repeating in TRENDING market and I found this pattern very, very useful.
I still think, that best trading advice is "trend is your friend" and I remember when I was always trying to catch bottoms or tops and I always got stopped out and miss continuation of dominant trend. This pattern on RSI is good indication, that trend isn´t finished yet and now you have a chance to get on the "train".
This pattern is simple : UPTREND CYCLE: bearish divergence -> bullish divergence -> new swing high -> repeat.
DOWNTREND CYCLE: bullish divergence -> bearish divergence -> new swing low -> repeat
Of course, you just can´t trade based on this pattern, I am using it with eliott waves, so if I see finished correction or 5-wave reversal and I am also seeing that trend divergence, I will always bet on trend continuation. You also can´t predict any take profit with this pattern, but as a trend follower, it works perfectly.
Comment:
BTW, I chose chart of ETC/USDT as an example, because I am in LONG position, this is more long term position, I am expecting some sort of rejection at around 10 USD, but we might be more bullish. But this should take some time.
