The Actual Grail

Quote from Buy1Sell2:

Certainly one must read the RSI signals carefully and correctly. I agree that they will give false positives on strong trends, however it's fairly easy to discern which are real or not by sheer experience looking at them. What the system calls for is to use trailing stops and you defer to those to take you out of a strong winner . Typically for an RSI signal to be taken, I like it to fester in a consolidated area for just a bit and have distance between peaks/troughs. In any event though, your stop loss on a false RSI signal in a strong trend will most likely be very low and it would be key to let that stop loss hit. In answer to your question about using MACD etc. Yes I use that , but the point here is that RSI can be a stand alone system.
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Don't mean to rain on anyone's parade, but a "grail" that has so many qualifiers (and these aren't all of them) isn't exactly a grail.
 
Thanks for posting the ES chart. A 3 minute ES is what I started out trading with RSI and Bollingers. I used a 1.5 point stop. Unfortunately, I found the double top/ double bottom method to be a little too subjective for me.

I traded this method along side a person who was VERY successful using it. The friend of mine had me code his trading method into an automated strategy. The results were horrendous! The reason being is that pattern recognition depends on the person looking at the chart.

What I see as a perfect double top with an RSI divergence might look like garbage to you. How far apart should the peaks be? How much of a divergence should occur between the peaks in RSI? Should the second peak hit the top Bollinger? If not how close should it be?

Also, you have to take into consideration that no two patterns form exactly the same.

I've known a person who was successful with this method, but I prefer to have something a little more mechanical. I like signals that are not open for debate. They either happened or they didn't.

That's just my $0.2

-Hoo_doo
 
Quote from Lamont_C:

Don't mean to rain on anyone's parade, but a "grail" that has so many qualifiers (and these aren't all of them) isn't exactly a grail.
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The point is that all of the signals can be taken with proper money management. Experience over the years has taught me which ones are the better ones. Those better ones are the grail .
 
Quote from Buy1Sell2:

The point is that all of the signals can be taken with proper money management. Experience over the years has taught me which ones are the better ones. Those better ones are the grail .
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However, the same could be said of any indicator: MACD, ADX, or even MA XOs.

On the other hand, if you're arguing that the grail is in the mind and not in the indicator, I'm with you.
 
Quote from Buy1Sell2:

Yesterday's action was very unmistakable
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This is a perfect example of what I mean by "subjective". The only trade that I see on yesterday's chart is the second short that you have listed. To me that looks like a "perfect" double top with a solid divergence in RSI.

I would not have taken any of the other trades and as a result, I would not have made any $$ :(

-Hoo_doo
 
b1s2,

This is your picture from today ( I assume ). I doctored it up a little so it may not look that great.

The circles on RSI mark what I would consider divergence. The buy for me would come when price came back and "tagged" the bollinger band.

-Hoo_doo
 

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Here are the last two days, if you'd like to be less active and use an hourly chart. Sell signal has not been generated yet on the hourly today although it is getting closer on the 15.
 

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