Today I'd like to introduce a few new concepts to my trading strategies. Also, there will be a simplification of the RSI levels used on the charts moving forwards. For an explanation of RSI Levels and how to set it up on your charts head here. The first new concept is that of 'The Floor' in RSI Trading. The concept takes into account a break of the 33 level in RSI that is sustained over time. I'll talk more about this in 'The Floor' - Bullish Reversals forum here.
The entry on this trade was taken based off of a 'W' Shape Formation (which I talk more about here) with a proposed Risk:Reward (R:R) Ratio of 1:2 (2x reward to 1x risk). You can also see that I defined a rising RSI trend line which shows the bounce of price above at the second 'v' point in the 'w' (see 'W' Shape Formation in the chart above).
2 days after entry into the trade I saw a significant Daily reversal (chart above), at which time I moved my Stop Loss (SL) to break even. Again, understand that I am experimenting with different processes here, and one that I am conscious of from my trading history is that of never letting a winning trade turn into a losing trade wherever possible. Those with an eagle eye may have noticed something else new on the chart - The Risk/Reward Fibonacci Hack (detailed here).
1 Day later and the trade closed at my Stop Loss (SL) which exited the position in a tiny profit. The really interesting thing for me is where RSI finished for the week - exactly at the Rising RSI Trend Line. This now begs the question for the start of the week - bounce or break??? (Chart below).