Jul 30, 2009

positive divergence in RSI

---RSI shows positive vivergence(top to top) so downside should be limited.

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The system features three moving averages:
fast(green), middle(red) and slow(blue).

Entry points are determined by the middle moving average(red) crossing the long moving average(blue)
and exit points by the fast moving average(green) crossing the middle moving average(red):

Go long when:
middle moving average(red) crosses to above slow moving average(blue) from below;
AND fast moving average(green) is above middle moving average(red).

Close long when
fast moving average(green) crosses to below middle moving average(red) from above.

Go short when:
middle moving average(red) crosses to below slow moving average(blue) from above;
AND fast moving average is below middle moving average.

Close short when
fast moving average(green) crosses to above middle moving average(red) from below.

---please never trade against the system.
---once trade initiated as per system then you can use rsi,macd,bollinger band,slow stochastic or parabolic sar to close your trade.


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--This is no coincidence.

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--If you know that your system makes money over the long run it is easier to take the signals and trade according to the system during periods of losses.

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--If you have a mechanical trading system that works, and you follow it rigorously your trading will be consistent despite the inner emotional struggles that might come from a long series of losses, or a large profit.

--The confidence, consistency, and discipline that a thoroughly tested mechanical system affords is the key to many of the most profitable traders’ success.