Hi all,
This is EOD based homework analysis for tomorrows Intraday Trading. We all are familiar with RSI trading style the conventional way based on overbought and oversold.
A little bit out of box analysis on RSI (14) , a method devised by Andrew Cardwill , saw from youtube.
It is a multi time frame RSI analysis starting from Monthly RSI value to Weekly to Daily.
Two levels are drawn on RSI - 60,40
Above 60 - BULLISH
Below 40 - BEARISH
Between 40 & 60 - Range bound.
No overbought or oversold analysis is performed here.
How to analyze this? This is purely back testing only, but you might have to coincide other factors for conclusion of analysis as well like PRICE ACTION.
Open a Monthly Chart eg ( NIFTY )
The RED vertical lines are the area which shows the RSI above 60, I am having lack of data , but for the sake of eg, you can see RSI above 60, Cool enough??
After marking the MONTHLY RSI REGION, look for the same on WEEKLY chart.
Now the blue vertical lines are the Weekly RSI above 60 levels. obviously on weekly timeframe, you will get ABOVE 60 factor way before it shows up on Monthly Timeframe and exits way before it shows up on Monthly chart.
We marked weekly RSI above 60 now.
Now we switch the time frame to Daily Chart and this is were we look for an entry. Now we know that Price is in Uptrend and we wanna take a BUY trade on the DIP ( which most of the fella traders fail here , while trying to BUY the DIP)
Now as per Andrew , on a daily time frame , the RSI value will bounce at every LEVEL 40 as this tends to be SUPPORT for a BULLISH market on a DIP
RSI value will repel back at every LEVEL 60 on a downtrend over the rally.
So, we are gonna participate on LEVEL 40 Dips, RSI Oscillates and touches LEVEL 40 and shoots up, upon next candle, we can go for LONG. This is his cardinal rule.
But, I have seen price mostly repel at LEVEL 50 as well, which is also a good level. Those marked regions are the levels which can let traders analyze the entry point, He or She can confirm with other mode of entry as well as in Candle formation or trendline break.
A trendline break on RSI will give you a leading entry rather than Price Trendline break. EG
The green market areas along with green trendline breaks are entry points after touching the LEVEL 40 or 50 respectively. So if there had been huge volume on break out, we can see the same on next day as well with momentum being BULLISH and most of the times, a gap up happens and we can use the 5 Minute Intraday system that was on other thread.
So, in order to get or filter the particular stocks, an AFL is required for scanning, obviously by the coders of this community, who are serving for the good of the fella traders. Kindly have a look at the methodology. It would be good if we can have a format as in follows. Just to analyze the RSI and give the value of it.
RSI setting - 14
All the Stocks in F&O or watchlist to be analyzed and RSI value on three timeframes to be resulted out.
FYI ALL : This kinda filtering can be used purely on Intraday as well with 1Hr,15MIN,5MIN Chart. But to arrive this level, one needs to filter which stock passes the Daily time frame.
From here, it can be converted to Excel and can be filtered for good purpose.
This is not a trading strategy, it is just a filtering mechanism for the good.
Hope everyone can benefit out of it.
Regards to all.
This is EOD based homework analysis for tomorrows Intraday Trading. We all are familiar with RSI trading style the conventional way based on overbought and oversold.
A little bit out of box analysis on RSI (14) , a method devised by Andrew Cardwill , saw from youtube.
It is a multi time frame RSI analysis starting from Monthly RSI value to Weekly to Daily.
Two levels are drawn on RSI - 60,40
Above 60 - BULLISH
Below 40 - BEARISH
Between 40 & 60 - Range bound.
No overbought or oversold analysis is performed here.
How to analyze this? This is purely back testing only, but you might have to coincide other factors for conclusion of analysis as well like PRICE ACTION.
Open a Monthly Chart eg ( NIFTY )
The RED vertical lines are the area which shows the RSI above 60, I am having lack of data , but for the sake of eg, you can see RSI above 60, Cool enough??
After marking the MONTHLY RSI REGION, look for the same on WEEKLY chart.
Now the blue vertical lines are the Weekly RSI above 60 levels. obviously on weekly timeframe, you will get ABOVE 60 factor way before it shows up on Monthly Timeframe and exits way before it shows up on Monthly chart.
We marked weekly RSI above 60 now.
Now we switch the time frame to Daily Chart and this is were we look for an entry. Now we know that Price is in Uptrend and we wanna take a BUY trade on the DIP ( which most of the fella traders fail here , while trying to BUY the DIP)
Now as per Andrew , on a daily time frame , the RSI value will bounce at every LEVEL 40 as this tends to be SUPPORT for a BULLISH market on a DIP
RSI value will repel back at every LEVEL 60 on a downtrend over the rally.
So, we are gonna participate on LEVEL 40 Dips, RSI Oscillates and touches LEVEL 40 and shoots up, upon next candle, we can go for LONG. This is his cardinal rule.
But, I have seen price mostly repel at LEVEL 50 as well, which is also a good level. Those marked regions are the levels which can let traders analyze the entry point, He or She can confirm with other mode of entry as well as in Candle formation or trendline break.
A trendline break on RSI will give you a leading entry rather than Price Trendline break. EG
The green market areas along with green trendline breaks are entry points after touching the LEVEL 40 or 50 respectively. So if there had been huge volume on break out, we can see the same on next day as well with momentum being BULLISH and most of the times, a gap up happens and we can use the 5 Minute Intraday system that was on other thread.
So, in order to get or filter the particular stocks, an AFL is required for scanning, obviously by the coders of this community, who are serving for the good of the fella traders. Kindly have a look at the methodology. It would be good if we can have a format as in follows. Just to analyze the RSI and give the value of it.
RSI setting - 14
All the Stocks in F&O or watchlist to be analyzed and RSI value on three timeframes to be resulted out.
FYI ALL : This kinda filtering can be used purely on Intraday as well with 1Hr,15MIN,5MIN Chart. But to arrive this level, one needs to filter which stock passes the Daily time frame.
From here, it can be converted to Excel and can be filtered for good purpose.
This is not a trading strategy, it is just a filtering mechanism for the good.
Hope everyone can benefit out of it.
Regards to all.
RSI Based Trading Mechanism ( AFL To be coded )
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