RSI Divergence Trading Strategy — Transcript

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1. 0:00so you're a day trader and you're having
2. 0:02trouble
3. 0:03knowing when the price is actually going
4. 0:05to reverse and you're looking for an
5. 0:06indication
6. 0:07of that reversal one of the main things
7. 0:10that i do on a day-to-day basis
8. 0:12is look for a divergence an rsi
9. 0:15divergence is one of the most powerful
10. 0:17tools that i use in my day trading
11. 0:19strategy
12. 0:21[Music]
13. 0:23so after posting the video of how i
14. 0:25scalped the markets
15. 0:27right here i also posted testimonials in
16. 0:30our discord group of trades that i've
17. 0:32actually taken using this strategy
18. 0:34from that i got a lot of dms asking hey
19. 0:37why was that your entry point and then i
20. 0:39realized i forgot to cover one crucial
21. 0:41thing and that is rsi divergence
22. 0:44so let's jump into the charts and i'm
23. 0:46going to show you how to find
24. 0:47an rsi divergence and how to trade off
25. 0:49of it so the trade in particular
26. 0:51that i did was on us 30. i did two
27. 0:55trades it looked like this
28. 0:57basically the previous night it was just
29. 0:59like cascading down and down and down
30. 1:02and i managed to scalp that as well
31. 1:04because going with the trend is
32. 1:06extremely easy so just like scalping
33. 1:08these moves down and taking little
34. 1:10profits here and there it's like
35. 1:12mindless work this is so easy to make
36. 1:15money off of
37. 1:16but then after it started losing
38. 1:18momentum i was like
39. 1:19cool i'm looking for a divergence so
40. 1:21let's put some moving averages up here
41. 1:23first we're gonna do
42. 1:24the 50 and the 200. let's just do the 21
43. 1:27for good measure for me it was late at
44. 1:29night the market was just dumping down
45. 1:31dumping down trading below the 21 and i
46. 1:33just like at any point here you could
47. 1:35have gotten in a short position for any
48. 1:37amount of time
49. 1:38and gone into profit for like two hours
50. 1:41if you guys don't know how to trade
51. 1:42momentum
52. 1:42watch this video but here at the bottom
53. 1:45this is where it got interesting
54. 1:46we started to consolidate and i was like
55. 1:48cool we're losing momentum
56. 1:50what happens when you lose momentum the
57. 1:52price tends to go the
58. 1:54opposite direction so let us pull up an
59. 1:56rsi
60. 1:58so to get the rsi on your charts click
61. 2:00the indicator button up here at the top
62. 2:01type in
63. 2:02rsi it's in the built-ins called
64. 2:04relative strength index
65. 2:05your rsi will look like this what you
66. 2:08need to do
67. 2:09is change the settings so right here on
68. 2:11the bottom just click the little
69. 2:12settings wheel
70. 2:13change the rsi color to yellow in
71. 2:16accordance with the color theme of this
72. 2:18channel
73. 2:18you're going to change the upper band to
74. 2:2050 and
75. 2:22the lower band 250 you're gonna get rid
76. 2:25of the background because
77. 2:26it is useless and that's what your rsi
78. 2:29should look like
79. 2:30if you don't know why go watch this
80. 2:32video so as you can see
81. 2:34the price was moving down and down and
82. 2:36down and down and down and down
83. 2:37eventually when it started to lose
84. 2:39momentum guess where my eyes always go
85. 2:41to the rsi right here we are creating
86. 2:45lower lows consistently
87. 2:49lower lows and lower highs means
88. 2:52a clear and concise downtrend this is
89. 2:55showing everybody
90. 2:56market structure what is a divergence a
91. 2:58divergence is when
92. 3:00two things that should be going in the
93. 3:02same direction
94. 3:04or look the same don't so looking at the
95. 3:07rsi right here
96. 3:09we start seeing higher lows
97. 3:12consistently time and time again
98. 3:16now just looking at it right here
99. 3:19this and this was a divergence
100. 3:23but it is not the divergence that you
101. 3:25want to trade off of
102. 3:26yes we are creating a higher low on the
103. 3:29rsi
104. 3:30and creating a lower low on the price
105. 3:32action but the price
106. 3:33still continued to go down i like to
107. 3:35wait until the rsi divergence
108. 3:38is extremely clear like look at this a
109. 3:41low
110. 3:42a higher low a higher low a higher low a
111. 3:44higher low
112. 3:45then we break above the 50 level when
113. 3:48the rsi is above the 50 level
114. 3:51that's showing bullish momentum that
115. 3:54means it's no longer bearish
116. 3:55it came down one more time just to
117. 3:57with people and that's
118. 3:59when i saw this like nice sloping upward
119. 4:02and i was like cool i'm getting in right
120. 4:04here
121. 4:04and sure as skippy i made a trade
122. 4:08at 32 372
123. 4:11so right here almost the exact
124. 4:14bottom i was thoroughly impressed on
125. 4:16this and then
126. 4:17as the price started to go in my
127. 4:19direction
128. 4:20came down and we got this big long
129. 4:23rejection wick
130. 4:24i got in on another position at 32
131. 4:27417 so right about there
132. 4:30now this is on a one minute chart if you
133. 4:33guys have not noticed yet
134. 4:34and i don't suggest everybody trade on
135. 4:38the one minute chart it's super volatile
136. 4:40and
137. 4:40nine times out of ten you'll get stopped
138. 4:42out but i know what i'm looking for and
139. 4:45i was looking
140. 4:45at higher time frames so if we take
141. 4:49this out to a 15 minute chart
142. 4:52i'm gonna make a box here
143. 4:55so that we know what we were looking at
144. 4:57because i don't want it to get lost
145. 4:58and this is that same price action on a
146. 5:0115 minute time frame
147. 5:02you can see how massively far away we
148. 5:05were from these moving averages
149. 5:07and what does price like to do price
150. 5:09likes to go back to moving averages when
151. 5:11it's over
152. 5:11extended so i saw i did all of my
153. 5:14analysis
154. 5:16on the 15 minute and then to find my
155. 5:18sniper entry
156. 5:20i got down to the one minute so i had
157. 5:22previously marked up my levels of where
158. 5:24that previous moving average was
159. 5:26and i actually just took it up to the 21
160. 5:29day moving average
161. 5:30which was just around 32 500
162. 5:34and so i know that with even numbers
163. 5:38market likes to hesitate so i did it two
164. 5:41dollars below
165. 5:42took my money and walked away so two
166. 5:44trades
167. 5:45very small lot size .02 on us 30.
168. 5:48one trade was 251 dollars and the other
169. 5:51one was 161 dollars
170. 5:53getting me 400 while i slept because
171. 5:56that was at market close so i woke up
172. 5:59and i had the money now you might be
173. 6:00saying to yourself artie why didn't you
174. 6:02hold that you could have made so much
175. 6:03more because
176. 6:04right after that it went to 32 798
177. 6:08i could have made thousands of dollars
178. 6:10yeah i could have
179. 6:11but that's not my strategy i was in it
180. 6:13for a scalp
181. 6:14i wanted a quick move take my money walk
182. 6:17away
183. 6:18i had no idea this massive spike and
184. 6:20rally was going to go
185. 6:21above the 200 moving average but i knew
186. 6:24that the price was going to retrace
187. 6:25to the 21 day moving average so yeah
188. 6:28super simple that's how to spot
189. 6:29an rsi divergence like if the rsi is
190. 6:32going
191. 6:32up but the price action's going down
192. 6:35that means it's eventually
193. 6:37gonna so if you've watched this long
194. 6:39guess what
195. 6:40you like the video so make sure you
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199. 6:46thumbs up click it and if you have not
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202. 6:52and we will see you later today when i
203. 6:54do a video on trader psychology