This  RSI Forex Trading Strategy With Awesome Oscillator is based on 2 indicators, the RSI indicator and the Awesome Oscillator Indicator.

The Relative Strength Index (RSI) is a very popular indicator used by many forex traders for finding such things as:

  1. overbought and
  2. oversold conditions
  3. as well as determining the strength of a trend.

In this case here, the RSI is used to find oversold and overbought conditions while the awesome oscillator is used as a trade filter so you reduce the false buy or sell signals generated.

Currency Pairs: Any

Timeframe: any but better on 15 mins and above.

Indicators: RSI default settings and awesome oscillator with default settings as well.

Now that you’ve understood the background, lets got straight in to actual rules of how to trade the RSI with awesome oscillator. For the buying and selling rules that you are going to read below, refer to this chart where you can see examples of a sell and buy setup:

 

BUYING RULES

  1. RSI must cross the 30 level line from below to upper.
  2. Next, check to see if there’s a green bar on the awesome oscillator indicator. If there’s a green bar, go to step 3.
  3. Place a buy stop order at least 2 pips above the high of the candlestick that corresponds to the step 2.
  4. Place your stop loss  order 2 pips below the nearest swing low or if that is too far away, place it “x” pips away from your entry price.
  5. For take profit, use the previous swing high point  or if that is too far away or does not exit, then use 1:2 or 3 risk to reward to calculate where you will take your profit.

SELLING RULES

  1. RSI must cross the 70 level line from upper to below.
  2. Next, check to see if there’s a red bar on the awesome oscillator indicator. If there’s a red bar, go to step 3.
  3. Place a sell stop order at least 2 pips below the low of the candlestick that corresponds to the step 2.
  4. Place your stop loss 2 pips above the nearest swing high or if that is too far away, place it “x” pips away from your entry price.
  5. For take profit, use the previous swing low point  or if that is too far away or does not exit, then use 1:2 or 3 risk to reward to calculate where you will take your profit.

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