1. Identify the long-term trend

The trend is you, so the first thing to do is identify the Trend. Use the MA200 to identify the Long-term Trend.

Basically, when the price moves above the MA200, which means an uptrend, buy orders should be considered. When the price moves below the MA200, ie the downtrend, sell orders should be considered.

2. Wait for the signal from RSI

The first part of the article talked about using levels 10 and 90 as the reference level to identify overbought and oversold areas. However, it is better if the RSI moves below 5 and above 95, because then the probability of winning will be higher.

3. Matching signals

As mentioned above, we will look for setups for trend trading. Specifically:

  • Buy setup includes: Price is in an uptrend (price is above the MA200) and RSI2 moves into the oversold area (ie below 10 or 5).
  • Sell setup includes: Price is in a downtrend (price is below MA200) and RSI moves into the overbought area (ie above 90 or 95).

4. Exit the order

Use MA5 as an exit signal.
  • For buy orders, the trailing stop is below the MA5.
  • For sell orders, the trailing stop is above the MA5.
Illustration buy order:


The price is in an uptrend, above the MA200;
Enter a buy order at the green arrow zone when the RSI moves down to level 5, the oversold level.
Note: When entering orders when the signal candle is completely closed, you need to use MA5 to trailing stop to maximize profits.

Sell order:


Prices are in a major downtrend, below the MA200.

Enter sell orders in the green arrow areas when RSI moves into overbought territory, above 95.

Note: Enter an order when the signal candle is completely closed, use MA5 to trailing stop to maximize profits.

Conclude

This is a fairly simple trading strategy with 3 common indicators. It is not used to identify tops or bottoms but to find entry points in the direction of the main trend.