One way to trade Reversals is to use a longer time frame and trade Reversals as they occur. In other words in the chart below when you have Positive RSI Reversal, trade it. If you have Negative RSI Reversal, trade it. If this was done using the RSI Paint Indicator beginning on 1/16/12 there were a potential 650 pips that could have been made. The chart is below. Notice because the EURUSD is moving in an upward direction, the trades with the longer runs are Positive RSI Reversals. Also notice how the location of these Reversal signals is where there is almost no drawdown. Positive RSI Reversals are Green solid lines and RSI Negative Reversals are Red solid lines. The RSI is a 14 period RSI. Traders can learn to trade Reversals and draw them with the RSI Paint Indicator although it is much easier to trade then Reversal signals are automatically located for you. Alerts can be sent to screen, email and/or text. Questions? paul@youlearnforex.com
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