ETHUSD 1H RSI 80-20 REVERSAL TRADING STRATEGY
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The rules to this strategy are posted on the chart.
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Comment:
I was asked if this strategy would work for a short trade - Yes, just make the rules opposite for a short trade. 1st swing high in 50 bars - look for rsi above 80 - wait for new swing high - on first swing high place a horizontal ray on the low of that candle for short breakout level and sell stop.
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Comments
HI, Shouldnt your risk reward start at your buy in price not the new swing low. The way you have done it, you aren't getting a 3:1 risk reward, in some cases (if your entry is high up) you might be getting less than 1:1.
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@monkia, What a great observation. Thank you, I will make that correction in the future.
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Quick question: Does it have to be 50 bars, and RR of 1:3? Rules has to be religiously followed?
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@cb247, The 50 bars helps create a more probable setup but you can back test it with something else and see. The profit target is completely flexible.
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@cb247, I personally scan my charts (pairs and time frames) and what I am looking for is a swing low with a previous fractal low just to its left. I don't always look for 50 candles. That way I can scan very quickly and after I find a pair then I look for other confirmation signals for the trade.
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Doesn't seem like you could use this strategy very often, just looking back over the trends for the last few months
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@PCHamamas, You may be right. But how I use it is as I visually scan my pair on different time frames I am looking for current patterns of a swing low/high with a new swing low/high with a rsi below/above 20/80 levels. I can visually scan for it quickly on my pair and quickly change my time frames. If you trade different markets or pairs it is a quick visual scan search. It is just another arrow in your quiver as you search and analysis the markets.
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Thanks for that, Ill give it a go. It looks like a very solid strategy.
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