Tuesday, June 1, 2010

RSI-SMA double-trap technique

For those who find applying RSI difficult, try the following technique

When price on 1month chart (Google finance) cuts SMA 34 line

a) from above, short till RSI 14/30min on 1 month chart touches 20

b) from below, long till RSI 14/30min on 1 month chart touches 80

Stop loss: When price whipsaws to cut 34 SMA again.

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Pl note:- "cutting" includes the crossover due to gap up or gap down