(1) A trading strategy based on the RSI alone is reckless and will always end up in a loss avalanche. (2) Your example shown here only produces a profit because the linear trend is upward. Stocks do not only go upward. (3) RSI is a saturating indicator. RSI can sit at an oversold level (e.g. 30) while the price continues to suffer further declines.
Please be careful with presenting over-simplified pictures like this, there are plenty of beginners on here that could mistake your "advice" for legitimate technical reasoning and lose a lot of money.
MiguelFTCurado
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@oerboom, Thanks for your contribution! Your are right but we didn't use only RSI to do the trades. Macro economy, support lines, resistances, companie revenue, etc. We should risk 2% maximum on every trade (You will need to lose 100% on 50 trades straight, wich is hard if you don't use leverage). I believe in this trade so much that I will recharge +2% if it drops to 130 support and +2% if drops to 108 support. Check out my other post explaining why I believe ALIBABA is undervalued ->
DeclanBrock
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very well said, thanks for your opinion. it will brilliant for to try set a SL in all orders.
@VasilyTrader, Yes, you can do that. Wait for a point on time with Higher RSI and the same or Lower price (RSI divergence). It will be hard to be lower than last support line shown on the chart (108). Since last week we had a stong Red Candle, I believe that o monday will occure a pullback (price goes up). GoodLuck!
MiguelFTCurado
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@MiguelFTCurado, Pullback is taking place as I predicted. So far so good. We will keep an eye on it.
MiguelFTCurado
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✅Comment here
Natestradamus
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@MiguelFTCurado, like you said weekly and daily RSI is at the lowest it has ever been in the stocks history with some absolutely massive volume the past 2 days. I'm sure hedge funds are loading up down here. Amazing discount at this price level + on the shorter term time frames the 4hr is in the teens on RSI and hourly oversold again with bullish divergence. Give me another red day Monday and I'm going hard on it
Please be careful with presenting over-simplified pictures like this, there are plenty of beginners on here that could mistake your "advice" for legitimate technical reasoning and lose a lot of money.