Simple Yet Very POWERFUL Swing Trading Strategy

Y

ykd2018x

Member
VIP
HI TRADERS / FRIENDS

Let me share a very simple and powerful tool which i have been using in my trading from very start point until now.

I found here many many indicators developments some are really very useful but i hope you will accept that.

OLD IS GOLD & SIMPLE IS EVEN MORE POWERFUL IF YOU CAN CHANGE THE WAY OF YOUR LOOKING INTO IT.

I am discussing one of my best SWING trading system.

RSI :- RELATIVE STRENGTH INDEX

PERIOD (7) :- because its short term swing trade , the longer the period will be the longer the term will be of a trade cycle but that doesn't mean you should use rsi with 2 periods for day trading coz it wil give you a feel of a doctor sitting at OT watching LCD saving someone from a stroke anyways lets come back to the point.

BUY LINE :- 60
SHORT SELL LINE :-40

I DONT CALL ABOVE OVERBOUGHT OR OVERSOLD because thats a wrong definition of RSI.

Entry for long :- on daily charts RSI(7) MUST , be above 40 , and on 1 hour chart its going above 60 and closing there itself.

Entry for short :- on daily charts rsi(7) must be below 60 and on 1 hour chart its going below 40 and closing there in previous candle.

Exit :- dont bet it a way that like you are long by past few days and you are betting that if it goes below 40 u will sell and take your profits , because if that happens it will screw ur 40 to 50% of profits , so the longest trade suppose to be is
long when its goes above and close above 60 then either consider take profits when its above 80 or 85 or else wait when its trying to close below 60 from above

Same goes for short.

If anyone need more details for this with pictures and back test feel free to comment me I will provide.

It's a tested technique for markets but dont think its easy , in markets nothing is easy and u have to consider lots of facts before openinig a position or closing.

From 40 to 60 when rsi stays u will realize market was in sideways , not good for trades so i have skipped them alrdy
 
Last edited:
S

San

Member
VIP
@ykd2018x, Pleas post picture and back test result . For day trade what is the RSI setting and if you have back test result for day trade please post.
 
Y

ykd2018x

Member
VIP
@ykd2018x, Pleas post picture and back test result . For day trade what is the RSI setting and if you have back test result for day trade please post.
hi san , its very easy to plot on your chart , u can see the results yourself not only in back test but in live trading also , dont force to check on 1 min chart , take a bit longer time frame 15 mins or better 1 hour to have better results

happy trading !!!
 
S

San

Member
VIP
@ykd2018x , Thanks for your response, So you mean, Day trading and swing trading setting are same ?
PERIOD (7)
BUY LINE :- 60
SHORT SELL LINE :-40
 
Y

ykd2018x

Member
VIP
@ykd2018x , Thanks for your response, So you mean, Day trading and swing trading setting are same ?
PERIOD (7)
BUY LINE :- 60
SHORT SELL LINE :-40
yes but remember please please even for day traidng try selecting a bigger time frame atleast 5 min chart would be good if possible 15 min
on 1 min chart things are moving and will make you crazy in few minutes


another thing is no technique is a perfect technique and market can move anywhere from the place it is right now , keeping that in your mind always , define your average points or stop loss points , wait for entries for conifrmation ,

a confirmation means atleast that candle close above 60 or below 40 with a good or average volume , after that you place your trade , in an ongoing trend you will see RSI WENT ABOVE 60 before 2 mins and now become 55 , then become 56 then 48 , then 61 again , you have to wait it close there

also rsi is just a relative index , you have to master it , it can go up to 100 but i haven't seen it there in us markets, indian markets i have seen rsi going 100 and then going 98 and market price still going up

remember take profits , and if you are out , re-enter in new trend or new trade cycle

the MASTER thing remains price action of the market which is always depends on 2 things VOLUME+PRICE no indicator is perfect in trade history

to identify trend you EMA 5,8,13 for understanding where is your FRIEND use EMA but trades are not based on EMA crossover only , use it with this RSI techinque its very powerful and why i said 5,8.13 because they are best for swing trading so far



any other questions welcome
 
S

San

Member
VIP
@ykd2018x , Thanks for you detailed explanation and tips. . People keep saying that use more than one reference point before enter or exit the trade which i understood and they are referring one of the major reference point is " volume " If you have an suggestion or any indicator which measure the Volume.
 
Y

ykd2018x

Member
VIP
@ykd2018x , Thanks for you detailed explanation and tips. . People keep saying that use more than one reference point before enter or exit the trade which i understood and they are referring one of the major reference point is " volume " If you have an suggestion or any indicator which measure the Volume.

1. people ? those who loose money always? do you mind what they say ? well !!! i dont mind ,

2. more indicators you use more you will spoil your trading future as well as your account , this blog is special for indicators , i also try some on sat. and sunday to have different point of view of markets because when i am trading i dont want to have different point of view coz market will go up or down so why to have opinion of so many indicators , do you have any news where someone become rich trading into markets using indicator self developed or whatever ? if indicator can do it , there is no need of you

3. volume is just a reference , actual thing what matters is price , and direction of the market i have an indicator but i cannot share it to anyone
you do have it , your eyes and brain bro !!!! , still i dont deny that we need use some indicators to atleast maths tell us some information about market for this below are the best indicators of all the time

1. EMA (5,8,13,21,)
2. RSI ( you have it as your basic indicator )
3. volume

if you add more u will make your chart ugly , very ugly there too much information that your brain cannot process at same time

you should have a good knowledge of RENKO CHARTS , TICK CHARTS

then you must define your entry , average point , stop loss point , target profit ,
even you do day trade or swing trade above are must

i am also full of mistakes i do mistake everyday but thanks god i dont loose much money when i do them

stay blessed with RSI (the most powerful indicator of trading history and future)

if you have a gun , and you dont know how to use it , or you dont have courge to shoot , the gun is just like a toy coz it is in wrong hands


also brother and everybody here , kindly please dont use rsi divergence indicator posted here , its slow and giving wrong divergence i have treid it
use basic one

OLD IS GOLD , SIMPLE IS BEST , use your eyes to see divergence they only happen 90% and fail 10% but your exit is the important thing
 
Y

ykd2018x

Member
VIP
add volume average instead of only volume which clearly gives idea that its above average or below average and how much
TOS has it as indicator builtin
 
P

paw

New member
VIP
do you use extended hours trading or only market hours for this strategy?
 
sylar2017

sylar2017

New member
VIP
@ykd2018x @BenTen - Can you please cross check the results ?

Strategy :

def TradeSize =2;
def Ent= RSI("length" = 7)."RSI" crosses above 60 ;
def Ext= RSI("length" = 7)."RSI" crosses below 40;
AddOrder(OrderType.BUY_TO_OPEN, Ent, open, TradeSize);
AddOrder(OrderType.SELL_TO_CLOSE, Ext, open, TradeSize);

Results : 20d 1Hr - /NQ( Futures 2 Contracts . 1 pt move = 40$ profit)
Max trade P/L: $5,340.00
Total P/L: $31,880.00
Total order(s): 16

I am looking for Entry Price. Is it the close of 1hr bar , or Open of next bar etc.

P/L - Too good to be true :)
 
D

DDW

New member
@sylar2017

Really great info here. Have you created a scan for these conditions, particularly on a daily chart?
 
BenTen

BenTen

Administrative
Staff
VIP
Warehouse
@sylar2017 I have not used this strategy so I can’t confirm.

However, from the original post it says “on daily charts RSI(7) MUST , be above 40 , and on 1 hour chart its going above 60 and closing there itself.”

Make sure your indicator works like that as well.
 
sylar2017

sylar2017

New member
VIP
@BenTen You are right , Let me work on creating a Strategy and back test 1 leg ( Long) .

@DDW Not Yet, Let me see if i can create one.
 
Y

ykd2018x

Member
VIP
@BenTen You are right , Let me work on creating a Strategy and back test 1 leg ( Long) .

@DDW Not Yet, Let me see if i can create one.
hi @sylar2017

thanks for taking interest into it

yes the technique works on all time frame but its better to use any indicator on longer time frame for 1 hour chart should be entry and exit chart for a trade however it should be double confirmed with daily chart rsi values

also its always a better idea that someone should wait until the bar close as bullish inside 60 area zone for going long , because many times you will realize in live trading that rsi cross 60 for now and 5 minutes later as market prices go down rsi shows you 58 , so its always a better idea to let it close inside the buy zone range then go in

other factors to be considered as well

in a consolidation mode of market or sideways markets the signal mostly fails as well still you make a back test , i am sure you will amaze our members with the results
 
D

DDW

New member
@ykd2018x

At what point do you see RSI too extended to enter a long position. This morning was watching ES for possible entry and for the first hourly candle that closed after RSI had crossed 60. When that candle closed, RSI had moved up to 69. Is that still a valid entry or too extended?
 
Y

ykd2018x

Member
VIP
@ykd2018x

At what point do you see RSI too extended to enter a long position. This morning was watching ES for possible entry and for the first hourly candle that closed after RSI had crossed 60. When that candle closed, RSI had moved up to 69. Is that still a valid entry or too extended?

HI @DDW

you have to be very careful for such case rsi moving upto 69with candle close is okay to enter but the more important thing is a price action and trend ,
you can use ema and hekinashi candles to see the trend or price action if market is moving upwards or in a uptrend ///// or only daily chart RSI IS ABOVE 60 then on hourly entry on 69 would be surely profitable no doubt into it ,

but if on daily chart rsi is below 50 and above 40 , same time rsi moving above 60 on hourly chart , be careful , this move can be reversed very quickly

i hope you got answer of your question
 
D

DDW

New member
but if on daily chart rsi is below 50 and above 40 , same time rsi moving above 60 on hourly chart , be careful , this move can be reversed very quickly
Yes, this is precisely what happened. I was overlooking the larger trend and there was a large reversal. Thankful for sim trading. :)
 
D

DDW

New member
@ykd2018x

Have you come up with a good TOS scan for this strategy? Right now I am manually scanning for possible setups during the day on stocks and indices, but it would be great to have this as a dynamic watchlist in TOS. Thanks again for this excellent strategy, really some great potential here!
 
mc01439

mc01439

Active member
VIP
Warehouse
@ykd2018x @BenTen - Can you please cross check the results ?

Strategy :

def TradeSize =2;
def Ent= RSI("length" = 7)."RSI" crosses above 60 ;
def Ext= RSI("length" = 7)."RSI" crosses below 40;
AddOrder(OrderType.BUY_TO_OPEN, Ent, open, TradeSize);
AddOrder(OrderType.SELL_TO_CLOSE, Ext, open, TradeSize);

Results : 20d 1Hr - /NQ( Futures 2 Contracts . 1 pt move = 40$ profit)
Max trade P/L: $5,340.00
Total P/L: $31,880.00
Total order(s): 16

I am looking for Entry Price. Is it the close of 1hr bar , or Open of next bar etc.

P/L - Too good to be true :)
The Strategy is looking back in the past by using AddOrder(OrderType.BUY_TO_OPEN, Ent, open, TradeSize);. may want to consider close instead of open on both lines of code to get a better picture of how RSI (7) works in real time.

Below are the results after the change to the order code.

def TradeSize =2;

def Ent= RSI("length" = 7)."RSI" crosses above 60 ;
def Ext= RSI("length" = 7)."RSI" crosses below 40;

AddOrder(OrderType.BUY_TO_OPEN, Ent, close, TradeSize);

AddOrder(OrderType.SELL_TO_CLOSE, Ext, close, TradeSize);

Results : 20d 1Hr - /NQ( Futures 2 Contracts . 1 pt move = 40$ profit)
Max P/L; $3,600.00


Total P/L; $1210.00


Total orders; 16
 
Last edited:

Top