overbought or oversold condition?

Hi ,
first I hope you do not mind if I post in your forums since I am fairly new and I should be in the QA forums...
moment...I've been looking at charts and price action for a couple of weeks and construction on a platform I have in mind. . .so much I have tested it backward, and continue week with a play ccount. The purpose is try to sell when it's overbought, and buy when oversold, according to a 9 RSI, 15 mins chart.
Now I have noticed that if and overbought or oversold condition starts, no matter how much in overbought / oversold it can go ( oversold dipped this friday for at least 40 pips on EUR/USD ) at the end it always comes out at the maximum point of this candle it went into. ( btw: it appears it doesn't apply for USD/YPJ).
Apart from me being not able to await hours for the inversion of trend, is it a statement that could have some fundation? Might it be true that it always comes back out?
thx

Quote:

---

Originally Posted by ;

thx,
nevertheless, I was just wandering of the correctness of this announcement, for EUR/USD particularly, that whenever there is a oversold/bought condition it comes home at he end. Quantifing that the tp and sl is something I am working on, and the RSI won't be the only indior on wich I will base my entry exit. It is just something I wanted to see if any1 else discovered, and when it's any ground for further research.

---

That I would be very cautious strict on how to play the overbought/oversold requirements of almost any oscillator. One of my first egies was based on something like I too noticed this always comes home at the end result, sadly not being able to see when will come home and how much goes farther before coming home brought me bigger losses than wins.

Recall that many instances the oscilator comes into overbought/oversold territory as a consequence of a strong trending market. Not all tendencies retrace at the same rate/percent, some actually go berfore any retrace.

It may be possible to develop a winning egy around this notion but not as simple as at first sight.

Goodluck!

Thx,
I have alredy seen the fozzy and your pipboxer2, unfortunately I trade with oanda plus they do not allow automated trading as far as I know. However, I was just wandering of the correctness of this announcement, for EUR/USD in particular, that whenever there's a oversold/bought condition it comes home in he end. Quantifing that the tp and sl is something I'm working on, and also the RSI won't be the sole indior on wich I'll base my entrance exit. It's just a thing I needed to see when it has any ground for further research, and if any1 else observed.

Like many newbies who thinks that RSI overbought/oversold will operate is not so true particularly when the trend is real strong it can remain up to get a very, very long time. You need to use another method in trading. I've seen people who rely upon RSI and MACD to trade, and they all get kill. Of course when you look back in time, they all look fantastic, although not in actual trading. Although you may observe some systems posted here which uses these indiors, they will also take under account like MA, BB, along with other aspects.

Thank you for your reccomendations and ideas, really apreaciate it.
/bow

Quote:

---

Originally Posted by ;

Hi ,
first I hope you do not mind if I post on your forums because I'm pretty new and I must be in the QA forums...
moment...I have been looking at charts and price action for two months and building on a system that I have in mind. . .so much I have tested it backwards, and last week using a drama ccount. The purpose is try to sell when it is overbought, and buy when oversold, based on a 9 RSI, 15 mins chart.
Today I have noticed that whenever and overbought or oversold condition begins, no matter how much in overbought / oversold it can go ( oversold dipped this friday for more than 40 pips on EUR/USD ) at the end it always comes out at least at the highest point of this candle it moved into. ( btw: it seems it doesn't use for USD/YPJ).
Aside from me being unable to wait for hours for the inversion of trend, is it a statement that may have some fundation? Is it true that it always comes straight out?
Thx

---

Hi Fxnoob,

There are a few things that you need to keep in mind.

RSI is an oscillator that generates false benefits in trending markets.

You need more than management of price movement to enter a trade. For instance you need to calculate the probable profit target and stop loss levels.

It is almost impossible to earn money by simply focusing on one indior.

I would suggest to go through the Fozzy daily trading system thread of if you are interested in automated trading the PipBoxer system. You'll come across several articles over there that will help you to have a better comprehension of the trading egies.

Great Luck,
Al