Last week we decided to investigate buying when RSI signals an overbought market. Our task this week is to develop a strategy around the concept. A natural starting point is to buy when RSI = 70, the traditional barrier for an overbought market. The exit strategy carries an equally important...

I mentioned in the last post that I trade trending forex pairs. EUR/USD fits this description well. It trends consistently, plus it is cheap to trade. The whole concept of RSI is to identify overbought or oversold points. It functions reasonably well in a ranging market. But one thing I...

This post is the first in a series on building a strategy entirely from scratch. We will discuss: - Identifying patterns that will form the basis of the strategy - Changing observations into a strategy - Testing the strategy concept on historical data - In what market conditions is my strategy...