How Price Action + RSI can possibly help you find breakouts
Hey traders,
in this trading idea I actually have a good opportunity to write about an indicator that I have been using lately to spot and verify trendline breakouts. So, many times, when a trend is "healthy", without many big pullbacks and other weird patterns or candles caused by fundamentals, the RSI tends to form a kinda-trend as well. That doesn't really happen in long term trends, but I've been facing this up a lot in short-term trends.
Once you properly draw your trend line in the 1h or even 30m chart try and check if the respective RSI is trending too. If it is then you can easily, spot these things:
- Possible fakeouts
- Trend line breakouts
- Strong bullish/bearish momentum (when RSI is going far from its trend line)
These 3 things are what I've seen using this small DIY indicator, and I'm pretty sure that your eyes will need some time to get used to spot these things, but once you manage to see them, then your trading setups will gain more quality than this that you already have, and I'm sure all of you do. :)
Thanks for your time! :)
in this trading idea I actually have a good opportunity to write about an indicator that I have been using lately to spot and verify trendline breakouts. So, many times, when a trend is "healthy", without many big pullbacks and other weird patterns or candles caused by fundamentals, the RSI tends to form a kinda-trend as well. That doesn't really happen in long term trends, but I've been facing this up a lot in short-term trends.
Once you properly draw your trend line in the 1h or even 30m chart try and check if the respective RSI is trending too. If it is then you can easily, spot these things:
- Possible fakeouts
- Trend line breakouts
- Strong bullish/bearish momentum (when RSI is going far from its trend line)
These 3 things are what I've seen using this small DIY indicator, and I'm pretty sure that your eyes will need some time to get used to spot these things, but once you manage to see them, then your trading setups will gain more quality than this that you already have, and I'm sure all of you do. :)
Thanks for your time! :)