The oscillating indicator 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.
Timeframe: any
Currency Pairs: any
Trading Session: any
How to Trade Using 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
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How to download and install an indicator
In order to install the indicator on your MT4 platform, you need to follow these steps:
- Click on the “Download Indicator” button located at the bottom of the screen.
- Save the file to your computer.
- Extract and move the files into the MT4>Indicator folder of the MetaTrader4 software file directory.
- Restart your Metatrader platform.
- Navigate to “Indicators.”
- And select the “RSI Retrace Scalping MT4 Forex Trading Strategy” template to apply it on the chart.
Note: This indicator was developed by Mark. AtoZ Markets does not carry any copyrights over this trading tool.
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