RSI Extreme System For MT4
Table Of Contents:
Please note: This strategy was publicly published in the trading community and is free to use. We do NOT make an attempt to decide if this strategy is profitable or not, because we know that the major factors regarding trading results are the skills/experience of the trader who executes the strategy. Therefore, we are mainly explaining the components and rules of the strategy. If applicable, we are highlighting advantages, disadvantages and possible improvements of the strategy.
The RSI Extreme System For MT4 super easy system that can create a steady flow of cash for the retail traders. But you must know the art of trade management. The rookies get excited and ignore all the basic concepts of trade management and they start overtrading.
In the last part of this guide, we will give you some amazing tips that will help to manage the trades like an expert. Zee Zee, I, TMA Bands, and RSI extreme are used as the indicators. By seeing the list, you must guess the strategy is very easy to use. But having an easy trading method is not enough. You have to know the steps that will allow you to trade with discipline.
In most cases, the traders will fail as they don’t have the skills to deal with the emotions. Even though the system is highly capable of dealing with the extreme situation and market behavior, breaking off the rules makes things harder for the retail traders to sustain. But don’t worry, those who are willing to follow the exact steps of this simple edge, will no longer worry about the losses.
For the expiry and selection of the time frame, you can choose any time frame but the expiry period is subject to the selection of the TF. We will deal with that later. For now, let’s see how the call and put option is taken with this astounding system.
Call option setup
Call option means, we will buy the asset as we expect the price to rise. So, it’s normal that our first step will involve the support level of the asset. You can use the traditional support finding technique or use the template as a guide as it shows you the main support for the specific time frame. For the long entry, we will teach you how to trade the reversal.
People wonder and say reversal trading is risky or more like a suicide mission. But learn from this edge and trade the reversal with confidence. We have to look for a structure like a double bottom. That means the price will consolidate in a zone where the bulls took control of the market with a great level of aggression. This can be easily determined by the help of a glowing green color arrow.
When the price test that significant level, you should see the glowing green arrow and a small dots of line should appear below the candle. The dots of line is the indication that the price will push to a new high. Now comes the most important part. At the bottom of the Zee Zee I indicator, you should see a small segment of the blue line in each place where the green arrow was visible.
Note that the blue segment of the line must be below the -100 level to consider it as a valid signal. If not, you should not try to take the trade. If the conditions are filled according to the step, execute the call option with optimized risk. But evaluate the payout for the trade. If it is less than 70% ignore the trade setup.
Put option setup
We now have the skill to trade the reversal. But for the put option, we should learn to trade with the trend. Knowing about both methods of taking the trades gives us the added advantage to deal with variable market conditions. The price usually forms bearish bars at the resistance zone.
Note that the resistance zone will be strengthened by the cluster of candles in the past. This means, when the price tests the resistance, it should have a massive number of candles which will make the task of the buyers very harder. Wait for the red arrow to form at that level. The red arrow tells us that the selling pressure is activated and we will be experiencing a sharp drop in the price.
At that time the Zee Zee I indicator should have the reading above 100. Wait for the red segment to form in the Zee Zee I indicator and you can short the asset. The intermediate trader might have some skill about the price action signals. They can significantly improve this edge by taking advantage of the PA pattern. The PA pattern is more off a charm when you take the trades with the trend. But if you are a novice, this not a big deal.
Most of the time bearish PA pattern is present when the red arrow is formed. Formation of the arrow mark tells us the price action scenario is bearish and the Zee Zee I indicator filters out the bad ones. Regarding the traditional cluster of resistance, it gives us the confidence the price will have a hard time pass through to above the resistance. As a trader, you should always sell the asset when the cluster seems like a layer of brick.
Managing the trades
The execution process for this trading method is very easy. But the traders mess up the things as they don’t have the management skills. In the first segment, we have told that you will know how to trade like a pro as we will teach trade management techniques. You have to filter out the trade that doesn’t give you more than a 70% payout for the risk you have taken.
Ignoring this key rule can put your capital at great risk. Second thing is to monitor the market activity and the major news. If the price is too choppy and the trend is not obvious in the 4H or D1 chart, that asset is not suitable for trading. It’s better to take trades in the reversal with a double bottom or double top structure rather than getting involved in a choppy market.
The last thing you should focus on practice. People often ignore the minor metrics of this system and take the trade. For instance, they don’t consider the position of the arrow and segment of the Zee Zee I line while taking the trades.
They should be printed at the same time or else you are dealing with data that has the potential to backfire. And always expect to lose 1-2% from the balance when you place the trade with this method. Having super high expectations and trying to push things to the extreme limit is the root cause of an aggressive attitude.
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