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Forex & Stock RSI-MA Leading Signals Trading Strategy


The Most powerful RSI Leading signal Trading Strategy – The BEST “Scalping and swing Trading Strategy” That No-one Ever Told You.

Trading NOTES

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The RSI is a very reliable and popular momentum indicator. Scalpers and swing traders use it to make the most profit during trading in the market. But for beginners, it can be tough to understand its signals.

At first, it might seem easy for new traders to jump into the market using the RSI indicator.

However, in reality, many of them end up losing money because they don’t know how to use it correctly. As a result, even though the RSI is a trustworthy indicator, it often gets misused by beginners.

Therefore, the Relative Strength Index is often undervalued by beginners who fail to grasp its parameter workings.

The real solution is that you should be able to read the RSI indicator through charts to assist you in gaining profits during trading.

Once understood and applied correctly, the RSI has the ability to indicate whether prices are trending, when the market is overbought or oversold, and the optimal price points for entering or exiting trades.

 

RSI-MA Leading Signals Trading Strategy

let me try again to explain the basic rules of trading with the RSI Trendline. We will use the RSI indicator to show us when the current trend has ended and a new trend is emerging.

In this strategy, we won’t measure overbought-oversold conditions or use crossovers as the system. Instead, we’ll take it a step further and look for momentum breakouts from the prevailing trend.

What I mean by this is that we’ll examine the price changes relative to the changes in peaks and valleys that the RSI indicator will produce.

Placing trend lines on this oscillator provides additional precision and extra trade setups.

Since the trading signals generated are leading rather than lagging, stop-loss orders can be placed below or above the candle where the RSI breaks its trendline. This allows for a good risk-to-reward ratio to appreciate trading opportunities.


  • Time Frame:
    • 14-period RSI: M5, M15, and M30
    • 8-period RSI: H4, Daily, Weekly, and Monthly
MetaTrader Trading Indicators
  • RSI
  • Simple Moving Average
How to install “RSI-MA Leading Signals Trading System
  • Download “TraderVersity.Com-RSItrendlineBreak” (Zip/RAR File).
  • Copy mq4 and ex4 files to your Metatrader Directory …/experts/indicators/
  • Copy the “TraderVersity.Com-RSItrendlineBreak.tpl” file (template) to your Metatrader Directory …/templates /
  • Start or restart your Metatrader Client.
  • Select Chart and Timeframe where you want to test your forex system.
  • Right-click on your trading chart and hover on “Template”.
  • Move right to select “TraderVersity.Com-RSItrendlineBreak” trading  system and strategy
  • You will see “RSI-MA Leading Signals Trading System” is available on your Chart

 

BUY Rules

In this bullish chart, we see the price moving above the 200-period S-M-A. This means that all traders, whether retail traders, big traders, or institutional traders, agree that the market is in a bullish trend.

Here, we find a valid RSI trend line. It provides additional visual confirmation that a trading opportunity is approaching. Using the RSI trend line breakout gives a buy signal a few candles before the actual movement.

After the RSI trend line breakout occurs, you should enter the market immediately by opening a BUY position here and setting the Stop Loss below the nearest swing low.

SELL Rules

In another chart, we can see how a short setup would look like.

In this case, we have the price moving down below the 200-period S-M-A, which means that all traders, retail, big, or institutional, agree that the market is in a bearish trend, making it a valid bearish trend.

We add a trend line on the RSI indicator when the price is moving against the main trend. As we discussed earlier, this is a valid RSI trend line and not forced. Then we identify the RSI trend line breakout in the SELL direction.

Next, we will open a SELL position here, placing the Stop Loss above the nearest swing high. The price continues its bearish trend, allowing us to gain a decent profit compared to the risk we set.

 

Trading NOTES

Even though 14 is the default period, that may not make it the best setting for your trading. Normally short-term traders use a S-M-Aller period, such as a 8 period RSI, to replicate shorter term movements in the market. Longer-term traders may opt for a higher period, such as a 20 period RSI or even 50. Depending on your trading style, you can lower your RSI to increase sensitivity or you could raise it to decrease sensitivity.

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