Step One: Find the currency pair that is showing a high the last 50 candlesticks. (OR low depending on the trade)
The 80-20 Trading strategy can be used for any period.
The reason for that is that there are reversals of trends in every period. So this can be a swing trade, day trade, or a scalping trade. As long as it follows the rules, it is a valid trade.
Step Two Using the RSI Trading Indicator:
When we find 50 candle high, it needs to be coupled with RSI reading 80 or higher. (If it’s low it needs to be combined with the RSI reading 20 or lower.
Step Three: Wait for a second price (high candle) to close after the first one that we already identified.
The second price high must be above the first high, but the RSI Trading indicator must provide a lower signal than the first one.Remember, divergence can be seen by comparing price action and the movement of an indicator.
If the price is making higher highs, the oscillator should also be making higher highs. If the price is making lower lows, the oscillator should also be making lower lows.
If they are not, that means price and the oscillator are diverging from each other.
Which is why it’s called “divergence.”
Just because you see a divergence, it doesn’t necessarily mean you should automatically jump in with a position.
We have rules in place that will capitalize on this divergence so that we can make a significant profit.
Keep in mind, that this step may take a bit to develop. It is very important to wait for this second high because it gets you in a better position to make a trade.
Price goes up/RSI goes down. That is the Divergence.
Step Four: How to Enter the Trade with the RSI Trading Strategy
The way you enter a trade is very simple.
You wait for the price to head in the direction of the trade and wait for a candle to close below the first candle that you identified that was previous 50 candle high.
Step five: Once you make your entry, here are your take profits.
I recommend you follow at least a 1 to 3 profit vs. risk level. This will ensure that you are maximizing your potential to get the most out of this strategy. You can adjust as you wish, but most good strategies that identify breaks of a trend use a 1 to 3 profit vs. risk level.
Step six: Once you make your entry, place stop loss.
To place your stop bump back 1-3 time periods and find a reasonable level to put your stop that makes logical sense. So you are looking for prior resistance, support.
Just reverse rules for a long trade.
PM me if you are interested in reading the complete strategy.
The 80-20 Trading strategy can be used for any period.
The reason for that is that there are reversals of trends in every period. So this can be a swing trade, day trade, or a scalping trade. As long as it follows the rules, it is a valid trade.
Step Two Using the RSI Trading Indicator:
When we find 50 candle high, it needs to be coupled with RSI reading 80 or higher. (If it’s low it needs to be combined with the RSI reading 20 or lower.
Step Three: Wait for a second price (high candle) to close after the first one that we already identified.
The second price high must be above the first high, but the RSI Trading indicator must provide a lower signal than the first one.Remember, divergence can be seen by comparing price action and the movement of an indicator.
If the price is making higher highs, the oscillator should also be making higher highs. If the price is making lower lows, the oscillator should also be making lower lows.
If they are not, that means price and the oscillator are diverging from each other.
Which is why it’s called “divergence.”
Just because you see a divergence, it doesn’t necessarily mean you should automatically jump in with a position.
We have rules in place that will capitalize on this divergence so that we can make a significant profit.
Keep in mind, that this step may take a bit to develop. It is very important to wait for this second high because it gets you in a better position to make a trade.
Price goes up/RSI goes down. That is the Divergence.
Step Four: How to Enter the Trade with the RSI Trading Strategy
The way you enter a trade is very simple.
You wait for the price to head in the direction of the trade and wait for a candle to close below the first candle that you identified that was previous 50 candle high.
Step five: Once you make your entry, here are your take profits.
I recommend you follow at least a 1 to 3 profit vs. risk level. This will ensure that you are maximizing your potential to get the most out of this strategy. You can adjust as you wish, but most good strategies that identify breaks of a trend use a 1 to 3 profit vs. risk level.
Step six: Once you make your entry, place stop loss.
To place your stop bump back 1-3 time periods and find a reasonable level to put your stop that makes logical sense. So you are looking for prior resistance, support.
Just reverse rules for a long trade.
PM me if you are interested in reading the complete strategy.
Comment:
1st take profit hit - 1 to 1 risk reward
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