The RSI indicator is one of the most popular indicator traders use for short term trading strategies, I will be doing several more tutorials in the next few weeks, demonstrating how to build a short term trading system with this indicator.
GOVERNMENT REQUIRED RISK DISCLAIMER: FUTURES & FOREX TRADING HAS LARGE POTENTIAL REWARDS, BUT ALSO LARGE POTENTIAL RISK. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING.ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY.
While we primarily recommend a short term trading strategy, there may arise situations that dictate a longer hold. Take a look at the chart below where a well planned short term trading strategy was utilized. Welles Wilder and features RSI in his 1978 book, New Concepts in Technical Trading Systems along with a few other indicators that I will be featuring in the next few weeks. The RSI oscillates between zero and 100. Wilder traditionally used 14 days to calculate the RSI oscillator, while I prefer to use a shorter time period. The best use for Oscillators such as RSI indicator is to measure short term overbought and oversold levels in choppy markets, this is where these indicators thrive. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. Your professional coaches will teach you highly effective ways to keep your ear to the ground and see the signs of these stocks before you read about them in the papers. Our coaches were hand picked from some of the best technical traders in the industry and are excited to teach you from their past mistakes! We have many different training options open to you at our online trading academy, from 1 on 1 coaching all the way through refresher coarses for seasoned traders trying to get their spark back into the market.
I find that the 10 day or 10 bar if you are day trading works very well for short term market swings. THE PAST PERFORMANCE OF ANY TRADING SYSTEM OR METHODOLOGY IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. However, for trend following they are considered the best indicators for short term trading strategies.
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