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Date Created: 12/21/15
How to Learn Day Trading Using Modified RSI Strategy Transcript 1. Title Slide 2. Good day traders this is Roger Scott from Market Geeks without another day trading video tutorial for you today. Before I begin I want to remind you to subscribe to our channel and don’t forget to visit marketgeeks.com for your free trading report. 3. One of the simplest indicators to use when learning day trading is the RSI indictor. A few weeks ago I demonstrated how to adjust the settings on the RSI to make it work better for short term and day trading market action. The RSI is a very solid indicator that tends to avoid false signals and random market noise better than most oscillators. 4. I will use stocks this example but this strategy works equally well with E-mini Futures and Forex Contracts. The first thing you need to adjust your chart's time frame to 15 minutes and change the RSI settings from 14 to 10. After you made your adjustments, find a stock or other market that's trending in one particular direction for at least 1 month. Since you are day trading you don't need to worry about what the stock did 2 years ago. 5. Here is a good example of a trade set up that occurred earlier this week. Once the RSI rallies above 80 I begin monitoring the stock and wait for the 15 minute bar to end. I place a market order roughly 10 seconds before the 15 minute bar comes to the end and closes. If you have use a direct access platform with ultra fast execution you should be able to do the same. However, if you use a slower platform you should probably place your entry order about 1 minute before the 15 minute bar that triggered the trade closes. 6. Once you successfully entered the trade you should stay in the position till the end of the trading day assuming the position is going your way. I enter a MOC (Market on Close) order and monitor the stock till the closing bell. When you enter MOC orders the broker does not execute your trade at the closing bell but during the closing range. This is the trading range that occurs during the last few minutes of the closing bell and is typically only a few ticks away from the actual closing price. 7. The modified RSI works equally well to the short side and the long side. Take a look at this example of IBM setting up for a long trade. The long term trend is up and the short term trend is choppy and range bound. This is ideal time to look for short term overbought and oversold set ups. 8. The stock has a set up immediately after the opening bell. You would place a market order just before the first 15 minute bar closes. It's very important to monitor the market during the first hour of the day because over 80 percent of all set ups occur within that time period. 9. After your order is filled you have to place a MOC order so that your position is liquidated near the closing bell. You don't have to manage the position as far as profit targets are concerned with this strategy. This example shows you the entire sequence from beginning to end. 10.Here is one last example for you before I get into the stop loss strategy for this method. You can see in this example how the stock is in a fairly strong uptrend. Therefore we will only look for signals going long in this particular case. 11.Once you get the signal be patient and wait till the end of the 15 minute bar that provided the signal to enter the market. Do not rush and enter before the entry bar is fully formed. 12.Always be patient and wait till the end of the day to exit the trade. The more time you give the trade to work the higher the odds that the trade will go your direction further. Over the long term this has proven to be the case, so don't make conclusions based on a handful of trades. 13.No strategy would be complete without having a safety net or a protective stop level and this one is no exception. You stop loss level is $0.05 cents below the low of the lowest bar of the day if you are going long and conversely, if you are going long your stop loss is $0.05 cents above the highest bar of the trading day prior to your entry. 14.That’s it for today’s tutorial, next time I will continue this series with more day trading strategies for you. Please don’t forget to subscribe to our channel for trading videos and trading tips and visit marketgeeks.com for your free trading report. This is Roger Scott wishing you the best in your trading. http://www.marketgeeks.com/how-to-learn-day-trading/ http://www.marketgeeks.com
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