18/05/2024 12:47 AM

SparkUnlimited

If You Really

Trading RSI Reversals – A Semi Forex Auto Trading With a Twist

I have written extensively about momentum in the market for traders and how important it is for currency trading beginners. There is a method I discovered about a year ago using the RSI Paint Indicator, that makes trading RSI Reversals like a mini Forex auto trading system for momentum.

I am going to explain how it works. You can do it manually but it is much easier if you have the RSI Paint Indicator because it makes it automatic. Automatic in the sense that the RSI Paint Indicator alerts you via your computer and or your email or texting device. You can read the complete article by clicking the link below.

The signals produced are momentum signals. That means people are trading, whether it be retail traders, companies, or governments. Momentum means that price is moving. It means there is an imbalance in the market and that price will move and continue to move until the forces that are against it, stabilize. That is how people make money in financial markets. It is not any more difficult than that which is why I write so often about why currency trading beginners need to learn about reversals and how to locate them so they understand momentum.

So, how does the momentum system work? The RSI Paint Indicator is measuring momentum movement. I can go about doing whatever I want to do which is quite often writing about Forex, one of my favorite things to do or research about trading Forex; take a nap, read a book, walk the dog, etc.

I am interested in the type of signal. There are 4 signals; positive reversal, negative reversal, positive divergence, or negative divergence (insert bearish for negative if you wish and bullish for positive). The definition of a reversal is at the end of this article.

I am most interested when the bulk of the signals are reversals. Reversals mean that the trend is starting up again and if the reversals are compatible then I am ready to place a trade. Divergence seldom causes a reversal (more on that later).

It would not be difficult to tabulate the statistical information for how successful these trades are but I know from experience that they typically start significant long term trades. If you have the RSI Paint Indicator you may want to try this trading technique. You may do the same thing by plotting on the hour, your 10 currency pairs. It will take a little longer but it can be done.

Try this method out. You will see profits from it, I can assure you. To learn more click on the link below and read the complete article.