My Swing Trade formula (1D chart)
Okay, today being 26th of October 2019, I discovered my trading mechanical system for 1D chart.
-SMA of 5 and 10 applied to close
-RSI of 9 applied to close
On a very good day I hunt for double top or double bottom on various currency pairs using the 1D chart, once I see that pair with my half shape signal (i.e double top or bottom, more like the shape of M and W but not fully formed yet ) I concentrate on it.
Next, I open the 1WK chart to confirm the trend that is currently at work on that pair because trend is my Friend. So assuming i opened it and discovered that the present direction is an uptrend using my RSI indicator (for me RSI above 50.24 indicates an uptrend and below 49.76 indicates a downtrend). The RSI was above 50.24 in the 1WK chart. So I head back to the 1D chart (My preferred trading time frame) and check if my hunted double-bottom signal (i.e W) has an RSI of 50.24 or above. If the RSI is valid then i wait for confirmation of the double bottom (i.e when the last arm of W start to form while also hitting my RSI uptrend point above 50.24 and when there is a crossover between the two SMA). I buy at this point placing my TP a little below the double bottom resistance level and my SL a little below the double bottom support level.
But when the present direction in the 1WK chart is downtrend, I head back to the 1D chart and wait patiently for double top formation (i.e M). I wait for the confirmation of the double top (i.e when the last arm of M start to form and hit my RSI downtrend point below 49.76 and when there is a crossover between the two SMA). I sell at this point placing my TP a little above the double top support level and SL a little above the double top resistance level.
PS: If the 1WK chart shows an uptrend, I concentrate only on double bottom signal in the 1D chart. If the 1WK chart Indicators show downtrend, I concentrate on double top signal in the 1D chart, basically means if I see a double bottom (or W) I will ignore it. That is to say uptrend indication in the 1WK charts means being on the look out for ONLY double bottom in the 1D chart why downtrend indication in the 1WK charts means being on the look out for ONLY double top in the 1D chart. You are welcome in Joining me in testing this system.