Scalping The Hell Out Of Any Market Using the RSI

[greencat]

The relative RSI is best known for identifying short-term overbought and oversold levels. Not many traders use it as a scalping tool.

The RSI’s calculation is similar to that of other oscillators. The indicator measures the difference between closing prices over a given period. I am using a standard 14 RSI period to determine my short trades.

The title of this thread is "scalping the hell out of any market using the RSI" especially the forex. Recently the forex has been in a steady sideways pattern and then erupts to a fib number. I wanted to scalp this kind of market and I wanted to make numerous trades using high lots of 1 to 3 and making 5 to 50 pips depending what time frame I am using.

The pure joy of trading and winning is great but we always must keep in mind the big MM. Money management. Its far better to conserve your money and wait for another set-up than it is to ride a loser and sweat it out. It may or may not come back to your entry. However, never panic just plan your trade and trade your plan. When the experience factor kicks in the trades will be more in your favor and with less anxiety.

The higher time frames, of course, will give the greatest profit potential. To beat the boredom of staring at the monitor, I often trade the 5 minute chart using the RSI. And I assure you I scalp the hell out of it. When using the 5 minute chart I am not looking for the monster move unless the other time frames are correlating to the 5 minute chart. That is when I will back off my 5 to 10 pip profit and try to ride the bigger move. However, because I am using large lots I am going to sell at least 1/3 of them on a ten pip move in order to create more space for the trade to develop.

Let’s learn how to scalp the hell out of the market using the RSI.

Let's use the 5 minute chart. The theory will remain the same on all time frames.

There is no better way to explain this strategy than with a chart.
To increase your odds play only in the direction of the trend. Determine the trend using a 1 hour, 4 hour, or daily chart.




For a bigger chart click the link below
http://farm3.static.flickr.com/2424/...0c63993b_b.jpg

15 minute chart



For a bigger chart click the link below
http://farm4.static.flickr.com/3477/...32456299_b.jpg