Tuesday 7 July 2009

Inverted H&S on RSI



Since I NEVER trade falling Ws on RSI, it's the one in black that is used to trigger the trade.

The lines of best fit in red, on RSI,show the trends before the W that help to make up the inverted H&S.

The W passes all the filters:
tight sharp shape with good gaps between the internal RSI points,
low level of minimum RSI at less than 30,
double move below the Lower Bollinger on Price,
potential reward:known risk ratio exceeds the minimum required.

The horizontal line in red on Price was where I placed my S/L on the running part after the previous move up.

The lower window shows the drop in Price required to produce an RSI of 50, during the active candle, just something I wanted to keep an eye on.

cheers theory

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