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RSI Retrace Scalping Forex Trading Strategy

Amandeep Sonewane | May. 22, 2019
RSI Retrace Scalping Forex Trading Strategy

You can now download the RSI Retrace Scalping Forex Trading Strategy for free on AtoZ Markets indicators gallery.

This strategy we will be looking at will be the Relative Strength Indicator (RSI). Normally, traders use it to determine overextended prices. If the RSI is above 70, the market is said to be overbought. If it is below 30, then the market is said to be oversold. But this is not the only way to look at RSI. Instead, in a bullish bias market, we will be looking first for RSI to drop, before it continues its bullish trend.

Most traders use oscillating indicators to identify overbought and oversold market conditions. This is a straight forward mean reversion type of strategy. Buy when the price is too low, sell when the price is too high.

Timeframe: any

Currency Pair: any

Trading Session: any

How to trade with RSI Retrace Scalping Forex Trading Strategy?

Buy Entry:

  • Price should be above the 200 EMA (green moving average)
  • The RSI should go below 40 but not go below 25
  • Wait for the RSI to go back above 40
  • Enter at the close of the candle corresponding to when the RSI crosses above 40

Stop Loss: Set the stop loss at the swing low generated by the bullish price thrust

Take Profit: Set the take profit at 2x the risk on the stop loss

Sell Entry:

  • Price should be below the 200 EMA (green moving average)
  • The RSI should go above 60 but not go above 75
  • Wait for the RSI to go back below 60
  • Enter at the close of the candle corresponding to when the RSI crosses below 60

Stop Loss: Set the stop loss at the swing high generated by the bearish price thrust

Take Profit: Set the take profit at 2x the risk on the stop loss

How to download and install an indicator?

In order to install the indicator on your MT4 platform, you need to follow these steps:

  1. Click on “Download Indicator” button located at the top right corner of the screen.
  2. Save the file to your computer.
  3. Extract and move the files into MT4>Indicator folder of the MetaTrader4 software file directory.
  4. Restart your Metatrader platform.
  5. Navigate to “Indicators.”
  6. And select “RSI Retrace Scalping Forex Trading Strategy” template to apply it on the chart.

Note: This indicator was developed by T. Morris. AtoZ Markets does not carry any copyrights over this trading tool.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.