RSI Breakout Strategy
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1ST POINT:
RSI MUST CROSS 60
2ND POINT:
RSI MUST MAKE A PEAK ABOVE 60
THEN RSI AFTER MAKING PEAK SHOULD SLOPE
DOWN BUT SHOULDN'T SLOPE BELOW 60 3RD POINT
AFTER SLOPE IT SHOULD RISE AGAIN AND
CROSS THE PEAK IT MADE FINAL POINT
RSI Calculation
1. Typical Price = (High + Low + Close)/3
2. Raw Money Flow = Typical Price x Volume
3. Money Flow Ratio = (14-period Positive
Money Flow)/(14-period Negative Money Flow)
4. Money Flow Index = 100 - 100/(1 + Money
Flow Ratio)
USE THIS SETUP FOR TIME BEING
·
RSI CROSSES 60
·
MFI CROSSES 60
·
RSI(14) Breakout
The RSI is classified as a momentum
oscillator, measuring the velocity and magnitude of directional price
movements. Momentum is the rate of the rise or fall in price. The RSI computes
mo mentum as the ratio of higher closes to lower closes: stocks which have had
more or stronger positive changes have a higher RSI than stocks which have had
more or stronger negative changes
Uptrends generally traded between RSI 40
and 80, while Downtrends usually traded between RSI 60 and 20.
If the relative strength index is below
50, it generally means that the stock's losses are greater than the gains. When
the relative strength index is above 50, it generally means that the gains are
greater than the losses.
The slope of the RSI is directly
proportional to the velocity of a change in the trend. The distance travelled
by the RSI is proportional to the magnitude of the move.
