Basically, RSI, the narcissist, is moving within a 0-100 range where its gorgeous line-body being inside its own separate pane below price, reflects oversold Market when it’s moving below 30-level line and overbought Market when it moves above 70-level line. RSI, the narcissist, indeed gives BUY Signals when it makes upward angles below 50-level line and SELL Signals when it makes downward angles above 50-level line, but because these angles don’t always have a reliable degree of statistical significance, we better consider valid BUY Signals the Bullish crossovers of RSI with 50-level line and valid SELL Signals the Bearish crossovers of RSI and 50-level line. Remember, a narcissist’s intentions or promises are just that…intentions and promises. Unless you see real actions -50 level line crossovers- don’t bite the bait.
PSAR on the other hand is a “prudent princess” 🙂
Everytime RSI and PSAR meet, RSI will do his best to conquer PSAR’s heart, but she will give her FIRST DOT of trust and closeness only after RSI has made a Crossover above/below 50-level line.
RSI & PSAR Fresh-3 Strategy
We are looking for the highest Time-Frame where PSAR confirms a trend opposite than Monthly’s. Then we want to see the same PSAR picture to the 2 lower Time-Frames. When all 3 Time-Frames show a FRESH New Trend to the opposite direction of Monthly, we WAIT for a correction on the 3rd Time-Frame and we Enter from there when RSI makes a crossover with 50-level line confirmed by PSAR’s 1st DOT.
Start from the highest Time-Frame (Monthly TF) and looking at PSAR determine the Trend. If the Trend is the same on next smaller Time-Frame, go to even smaller. Slowly go down gradually switching to the next smaller Time-Frame.
When you find a Time-Frame where the Trend is the opposite than Monthly TF, this is going to be the 1st
of the Fresh-3 Time-Frames. On the next smaller Time-Frame, you want to see the same Trend. If it’s not there yet, WAIT. If it is, check this 2nd TF and switch to the next smaller, which will be the 3rd TF of the strategy.
Here you WAIT patiently till you see a valid correction which means the first PSAR DOT to the opposite direction. WAIT for the correction to finish and ENTER when you see an RSI/50-level line crossover confirmed by the first PSAR DOT.
Place your SL a few pips below/above the first PSAR DOT and trail it keeping the same pips-distance below each new PSAR DOT. EXIT when RSI crosses 50-level line to the opposite direction.