rsi-8-trading-strategy-for-profitable-intra-day-trading - mejiahapse2000
Description: The Relative Military posture Indicator OR RSI is a very popular momentum oscillator among traders of all sorts. Be it swing trading or intraday trading, RSI comes to our mind as a handy tool to interpret the market's momentum.
There is a saying that "momentum precedes Leontyne Price" which means that the momentum of a financial instrumental role often slows mastered earlier an actual turn in price happens. This is just like a motorcar slowing down before taking a U-turn. The real slowing down of the car indicates that a reorientation might be in the offing.
Today, we volition discuss RSI 8 trading strategy for intra-day trading. This RSI scheme involves changing the default RSI setting of 14 periods to 8 periods. This makes the indicator more sensitive to price changes. The overbought and oversold settings remain the same at 70 and 30 severally. Also, we will take back a 15-mins lineage chart based on closing prices. This will urinate our RSI 8 interpretations more precise as information technology is calculated based connected closing prices.
To get-go with, we will be looking for momentum changes with the RSI 8 trading scheme. To do indeed, we will be looking for divergences betwixt cost and the RSI indicator. Simply put to sleep, when prices are making higher highs, patc RSI 8 refrains from doing so and makes lower highs instead, we get a negative divergence / bearish divergence in place. Conversely, when price is making lower lows while the RSI 8 is making higher lows, we have a positive divergence / bullish divergence in place.
However, a divergence in itself is not sufficient reason enough to go long-run or short along an instrument. It simply indicates a slowing push down of impulse. Thence, for confirming our entries, we pauperization to deal the cost chart. A chart pattern breakout backed by a divergence happening the RSI 8 index is the way to go! It confirms that the surge has finally inverted.
In the to a higher place example of TCS, we can see how confirmed buy and sell signals were generated along a break out of consolidation patterns following a divergence on the RSI 8 indicator.
It pays to wait for chart pattern breakouts pursuing RSI 8 divergences!
If you want to learn more of such stimulating and powerful trade setups that have stood the test of clock and are still utilised in today's Earth away occupational group traders, please consider attending our Mentorship row.
Source: https://www.abhijitpaul.com/rsi-8-trading-strategy-for-profitable-intra-day-trading/
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