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Strategies & Market Trends : The Art of Investing -- Ignore unavailable to you. Want to Upgrade?

To: Qone0 who wrote (5970)	11/16/2022 1:48:14 PM
From: Sun Tzu	2 Recommendations Recommended By rdkflorida2 sixty2nds Respond to of 10713

I agree that RSI is a very useful indicator. My goal is to create a better RSI such that: (1) It has all the properties of the regular RSI and nobody needs to be retrained with it. (2) It gives an earlier signal at major market tops and bottoms. So what I made is the same RSI that we all love, but compared to the regular RSI it gives about one bar advanced notice. And we all know how big of a difference that can make. I am going to do a better job of highlighting how this is achieved. That chart is too crowded for most people to see things that I see.

To: Qone0 who wrote (5970)	11/16/2022 1:53:36 PM
From: Sun Tzu	Read Replies (1) \| Respond to of 10713

This is another indicator that I use. I call it TCD for "Trend Convergence Divergence". Here is a basic way to use it RSI: When RSI is oversold or overbought, wait for TCD to cross above the zero line before you act. You can think of this as being somewhat similar to HSI or StochRSI in how it can be used. But it is very different in nature. In the chart below, I've marked times when RSI-8 on NDX was oversold/overbought, and then TCD crossed above/below the zero line. Again, this is meant to give a 1 bar advanced notice. After that, you use your normal trading techniques to take profits or cut losses. However, as a rule, one should stay with the position until it goes above/below the zero line.

To: Qone0 who wrote (5970)	11/16/2022 2:18:27 PM
From: Sun Tzu	1 Recommendation Recommended By rdkflorida2 Respond to of 10713

Here's how TCD + RSI with minimum trading skills would work. The system went like this: Buy when RSI is oversold and TCD crosses above zero Sell when RSI is overbought and TCD crosses below zero Take profits/cut losses when TCD crosses zero after you took a position and RSI is so-so. The annotated chart is below.

To: Qone0 who wrote (5970)	11/16/2022 7:11:42 PM
From: Sun Tzu	Read Replies (2) \| Respond to of 10713

Since you love RSI-8, I've put together two charts with RSI 8 on them: 2018 and 2021. All the parameters are the same for all 3 indicators. The top indicator is my RSI with high sensitivity. The middle indicator is also my RSI with low sensitivity. The bottom indicator is the regular RSI that everyone is familiar with. Most of the times my RSI and regular RSI behave the same way. But before major tops and bottoms they behave very differently and mine gives you advanced notice of what is to come. I have highlighted regions of interest, and in a few places I've also marked the divergences that you see between the price, my RSI and the regular RSI. I didn't mark every little difference between the two because I think once you look at my first few examples, you know what to look for. And since each chart covered a little more than year, you have the opportunity to scrutinize mine vs regular as well as how setting the sensitivity dial affects it (in short, the lower the sensitivity, the more it behaves like the regular RSI). How much money would these advanced notices have saved you (or made for you)? 2018 . . 2021