The RSI trading strategy with Awesome Oscillator is a simple and effective way to trade a variety of markets. The strategy can be used on any time frame from intra-day to daily charts. The key to the strategy is to look for divergences between the RSI and the Awesome Oscillator. A divergence occurs when the RSI is making new highs or lows while the Awesome Oscillator is not. This indicates that the market is losing momentum and a reversal is likely.
The buy setup rules are as follows:
1. Look for a divergence between the RSI and the Awesome Oscillator.
2. Enter a long position when the RSI breaks above its previous high.
3. Place a stop loss just below the most recent low.
The sell setup rules are as follows:
1. Look for a divergence between the RSI and the Awesome Oscillator.
2. Enter a short position when the RSI breaks below its previous low.
3. Place a stop loss just above the most recent high. The time frame you use will depend on your trading style.
If you are a day trader, you will want to use a shorter time frame, such as the 5-minute or 15-minute chart. If you are a swing trader, you will want to use a longer time frame, such as the 4-hour or daily chart. The key to successful trading with this strategy is to always use a stop loss. This will help you to limit your losses if the market turns against you.
Here are a few tips to help you trade the RSI trading strategy with Awesome Oscillator:
1. Look for divergences on a variety of time frames.
2. Be patient and wait for a clear signal before entering a trade.
3. Use a stop loss to protect your capital.
4. Remember that this is a momentum-based strategy and the market can stay in a trend for longer than you expect.