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659

Philip,

I need to ask you an RSI question; I hope I can explain it satisfactorily.

First, I’m using 4-hour Wealth Lab data to calculate Monthly RSI(14). So, I need to look back 1,680, 4-hour bars to calculate the Monthly RSI(14) at any juncture (6 bars per day X 20 days per period X 14 periods). If you like, I can change 20 to 21.

I’m using the formula to calculate it outlined here:

RSI Calculation | Macroption

I need to obtain the last 15 “Monthly” Price Closes over these 1,680 bars, so that I can obtain the UP or DOWN delta between these Monthly Closing prices, which as you know, is part of the RSI formula. When looking at Monthly RSI, most (if not all) charting packages will use the Closing Price on the last day of the trading month, as the basis for further RSI Calculation.

Now here’s where it gets tricky - in WealthLab, at any given 4-hour bar juncture, it’s very easy for me to look back at 14 different periods of 20 trading days, to obtain the requisite Closing prices, BUT these Closing prices won’t necessarily fall on the last Trading day of the Month, and it’s very difficult programmatically to determine what the last day of the Month is. It is much easier to just go back 20 days at a time from a given point in time.

So, here’s my [B]QUESTION[/B]: do you think it is OK to grab Closing Prices moving backwards 20 days at a time for 14 periods from the current Bar? This would mean that I would be grabbing Closing prices that aren’t necessarily on the last trading-day-of-the-month boundaries (but I would still be getting 14 month’s of Closing price info), AND this would effectively result in having a different Monthly RSI(14) value at every 4-hour bar, which makes Monthly RSI(14) a bit more granular (this could be a positive thing), rather than just a single Monthly RSI(14) value that’s used for the entire trading Month.

If you say that it’s OK to do this, then super cool. If you answer NO to this, playing devil’s advocate, I would argue that a single Monthly RSI(14) value doesn’t necessarily represent the RSI properly within an entire month, since the underlying Closing prices used to calculate RSI are merely a single snapshot on the last trading day of the calendar month.

I hope my question is clear - kinda hard to explain it all in text, but I gave it my best. I can see why RSI values differ from package to package.

660

Well my answer is yes and no actually. Value of the monthly RSI changes naturally with every 4 hour bar so we don’t have a problem here. I’m still waiting to see if that calculation will yield anything close to the monthly RSI reading.

The no part, is just we look at the value of the RSI at the close of each month. So you need to take the first 1680 bars and consider them month 1. Because you will look at the value of the RSI after the end of the month and not during it.

661

OK, that makes sense, and politically correct too :35: Let me work on it more tonight, and I’ll let you know what I come up with. You’re right, my Monthly RSI value on last 4-hour bar of the month has to be very close, if not exact, to the actual Monthly RSI value, for this to work.

Also, assuming that this does work, should I use 20, 21, or 22 trading days in a month per period (as the average # days to look back)?

Just out of curiosity, what time zone do you reside in? I live in NY, USA (EDT).

662

Hi all. Could someone answer a question for me please? I have been practicing Philips strategy and seems to work great but I’m just a little unclear on one thing. For example if setting up a buy position 20 crosses above 50 ema do you need to wait until the stochs become over brought or could it be just before the emas cross. Just wanted to know that it MUST be after emas cross. ?? Thanks

663

Hey guys,

would you consider this as an valid bearish setup?

stochastic_trade_GBP-USD.jpg700×455 29.5 KB

I missed the entry a little bit, I think, the setup is confirmed with the bar under the first red arrow (the one without filling). But I just entered the trade in the middle of the bar under the second, red filled arrow.

What do you guys think, is this setup ok?

664

It must be after the cross.

20 EMA cross above 50.

Stochastic moves from overbought to oversold.

Stochastic main line crosses above D line. You buy.

665

Thanks Philip you are a gentleman. I have followed this thread from the start and you have had the patience of a saint. So… Main crosses d line below 20 would this be my buy signal in attachment . As green crosses red dotted line below 20 I buy? Also how do you work out when the candle closes if you are in the middle of the tf for example.

Thanks again

image-3526263581.jpg394×700 37.5 KB

666

Hi Philip, just wanted to say thank you for the brilliant strategy you shared. I’ve been backtesting your strategy and I have to say that it works pretty well with good Risk - Reward ratio. But I’ve been wondering, lately I’ve been trying to “modify” your strategy to give me more signal, and this is how I trade it :

Most of the time, there are moments that you find yourself left behind by the H4 confirmation signal, and what I did to join the trend is :

In a downtrend…

  • I wait for Stochastic to cross above the Overbought and enter SELL when it is leaving the Overbought area and heading towards Oversold area
  • My exit point is when the Stochastic has successfully entered the Oversold area and the main line has crossed the D line
  • I also put my stoploss just above the nearest high that is align with Stochastic overbought nearest high.
  • My strategy above is based on H1 timeframe and I determine the trend using H4 timeframe.
  • I also don’t want to open any position against the H4 timeframe trend.

Vice versa for an Uptrend

Just wanna ask for all y’all opinion, do you think it is wise to do this, cause I’m starting to hesitate about using this strategy since I’m now currently has several floating loss positions and is very hesitant whether I should exit right now or hold on till’ it hit me StopLoss(es)

Hope my post is clear enough for all y’all to understand

[I]Update : I lost 2 positions today on AUD/USD & USD/CHF :frowning: it seems that the current trend is about to reverse or continue with a lot of punch[/I]

667

I enter on the formation of the new candle, that’s how I work it out.

668

May be share a chart to illustrate what you mean? I’m a bit lost.

669

I’ve edited my post to make it simpler to understand (Hopefully). I’ll try to post some Clear illustration tomorrow, since Pic editing isn’t something i’m really familiar with, haha.

670

Ok great thanks. So that means you sit and wait/ watch until the previous candle closes?

671

Guys, watching these next candle setups…

audcad-h4-fxdirectdealer.jpg700×503 35.1 KB

audjpy-h4-fxdirectdealer.jpg700×503 34.7 KB

nzdcad-h4-fxdirectdealer.jpg700×503 32.4 KB

nzdjpy-h4-fxdirectdealer.jpg700×503 31.9 KB

nzdusd-h4-fxdirectdealer.jpg700×503 33.8 KB

672

I Believed that NZDJPY stochastic had already crossed, shall wait another candle to form to place order.

673

Philip, make believe that we are currently in mid-March. The Feb, 2015 Monthly RSI(14) would need to use itself (Feb) and the 13 prior months to calculate its Monthly RSI(14). Now say hypothetically that it’s March 16th, and we want to use the current March, 2015 Monthly RSI(14) value for filtering purposes in our trading. How is this March, 2015 Monthly RSI(14) calculated, at any given time in March, 2015?

Is it:

  1. We consider the partially completed March, 2015 to date, as the 1st month, and the Feb, 2015 completed month and prior other 12 months would be used? In other words, we’d use the last Closed price in March, 2015 to date, as a basis for the 1st month of the RSI calculation.

OR

  1. Would we look back from March 16, 2015 to Feb 16, 2015 (to get a full month) and then use the completed Feb, 2015 month (and backwards) to get the required 14 period Closing values needed to compute RSI?

Thanks in advance.

674

Watch copper aswell

image-799451878.jpg395×700 48.7 KB

675

Hi pipalicous, it appears that one failed. glad i had a SL

fail.png457×619 4.81 KB

676

[QUOTE=“pipalicous;691552”]Watch copper aswell <img src=“301 Moved Permanently”/>[/QUOTE]

May I ask what charting software you’re using pipalicious?

677

Philip, in addition to answering the above question, I implemented # 1 above, and I think it’s working. Can you provide me with a chart where I can read Monthly RSI(14) values for:

  1. EURUSD, 4-hour bars from 12/2009 through 3/2015, where Monthly RSI(14) values are added to bottom of chart;

  2. EURUSD, Monthly bars from 12/2009 through 3/2015, where Monthly RSI14) values are added to bottom of chart;

I know we may not be totally spot on, but I need to compare what you have with what I have, as an initial sanity check.

Thanks again.

678

Here’s the illustration

20 - 50 EMA modification failed.jpg700×334 39.6 KB

  1. is the entry point to buy since Stochastic is leaving the oversold area and heading upwards
  2. I planned to exit whenever Stochastic has reach the overbought area and is rebounding
  3. Stoploss was set just below the nearest low of the Price & Stochastic (has to be aligned). Unfortunately Stochastic never reached Overbought area and went straight down and got me Stopped out of me profits :frowning: :frowning: :17: :17:

[I]*ps : - The current trend of AUD in both H4 & H1 chart were both bullish/going up

  • I’ve modified the Stochastic from 14,3,1 to 14,3,3 to smooth it out a little bit
    [/I]