I am sharing a trading system that I use. I call it The Kelowna Counter. I like this setup because I only have to check my charts a couple times per day. Constructive criticism welcome!
Disclaimer: I always trade small at first and add to wins. For me that means being able to ride out a 100+ pip run against me without risking more than 0.5-1.0% of my account.
Here is the setup:
4 Hour Chart
Momentum = 21
RSI = 21
Weekly Pivot + Monthly Pivot
In a BULL trend:
- Locate BEARISH divergence between the highs of price and of momentum.
- Look for the RSI to be overbought.
- Draw a trendline under the price lows within the divergent range.
- SELL when a candle closes (or new candle opens) across the trendline.
The trade is over if:
A) RSI crosses under 40 then retraces to 45, or
B) RSI crosses under 35 then retraces to 40, or
C) RSI < 30 (oversold)
**The target is usually reached 150-300 pips from onset of the trade. These trades can take anywhere from 1-5 days, and I often carry them over the weekends. It also works on any major or cross pairs, I don’t trade exotics. Also, I sometimes will set a specific target at a missed weekly or monthly pivot and close even if the trade is short of my RSI goal.
A) Set a Stop Loss at 100+ pips or 0.5-1% of the account.
B) Stop trade if momentum value increases above its value at the trend high.
C) Stop trade if RSI never reaches 40 and retraces to >60.
When to add to the trade:
A) Once profitable, I usually add on any rebounds, if price retraces to a pivot or previous support/resistance level.
b) I’ll add after 100 pips gain and set a stop-loss at the point the original trade was started.
Some Examples Below: