Hello Guys Today in this particular Post we are going to talk about the RSI Based Intraday Trading Strategy For Option Buyer .If You are an Option Buyer And Suffering from too much Losses In The past months Year . Then In this post we will try to give the a Strategy Which is Based On RSI Which Is Very effective and Work . The accuracy Of RSI Based Intraday Trading Strategy For Option Buyer Is Around 70% And The Profit Loss Ratio Of This Option Buying Strategy Is 1:4 to 1:10 it Depends On you That How Much time you can Hold The Trade In profit And Cut your losses At Lower Side and take Higher profit.
What Is RSI And How It Works
If You Are A trader and Trading On The Regular basis In your life then You must Know What Is RSI, RSI is Stand For RELATIVE STRENGTH INDEX Which means It Show The Strength In The Index Or Stock Or Crypto In which You Are Trading. As its Name Relative Strength Index Its Show Caculation Based recent candles Strength. It Not Work On As Like EMA SMA And Other Indicator. RSI Is the Best Indicator Because i Think this is the one the leading Indicator. All Indicator Like EMA SMA And Other Are Just Give The Signal After The Price Moves The 10 to 30 % but In RSI you Can Find The Signal In Just 2 to 5 % Move if You Can Enter
How Plot RSI On Chart
Ploting Indicator on Chart Is the Very Simple And Easy process you Just Need A Broker Account Where you Trade Or You Can go with https://in.tradingview.com/ Because Tradingview Is The One Of The best Charting Software Or Website Which is Used by Millions Of the People around The world. For Ploting RSI On Chart Just Click On Indicator And Type RSI Here You Will Get RSI click On It .It Get Ploted On Chart.
- Go To https://in.tradingview.com/
- Click On Indicator On Top Bar
- Type RSI
- Here You Find RELATIVE STRENGTH INDEX
- Click On It
- Now RSI Ploted On Chart
Check Images For More Details
Step 1 Click on Indicator
Step 2 Type RSI And Click On Relative Strength Index
Step 3 Now You Can See RSI Is Ploted As Shown In Picture
How To Trade On RSI Indicator
As We Discuss Above RSI Is Relative strength Index Trading Indicator which show The Strength Of Stock Or Crypto.In RSI There Are 3 Band Upper Band Lower Band and a Middle band, All These Band has there own significance.
Here In Above Image Shown The RSI ploted On Nifty chart .Basically RSI Show Overbought And Oversold Conditions.When The RSI Is Reach A the top or its Upper band Then It Shows That The Stock Or Crypto Is Overbought. Means From Recent Day Of time the Stock is continue In buying Side. Now It time To Hold The Price Of Stock Or Crypto.
As You Can See In The Image When Price Is at To Level Then RSI Is also Showing That The Stock is Overbought And Its Need To Come Down To Middle Band Of RSI To Relax The Price. Then You Can See After Some time Price Is Come To Lower Level and RSI Also Come To Middle band And Then A Lower Band .
In Oversold Conditions If price Continues Falling After a Certain Time period The Price Is Too Much Sold Then The New buyers Come to Take The Positions To Take The Price to upper Band Of RSI.
As You Can See In The Image When Price Oversold In The Chart The RSI Showing strength And After Some Time The Price Got Boomed and Reached To The Upper band Of RSI .
When To Buy The Stock Or Crypto Using RSI
As We Discussing above RSI Shows The overbought and oversold Conditions If You Want To Trade The Price Then There is very simple Way To trade The Price Using RSI.
- First Of all You Need To Check The Trend On Daily Time Frame
- If Trend Is Bullish You Just Take The Bullish Trade Ignore Selling
- If Market In Bearish Trend Follow Selling Ignore Buying
- Now Shift To 5 Or 15 Minutes
- Plot RSI To Check The Lower Time Frame Trend
- If Trend Id Bearish On 1 Day Time Frame
- On 5 Minute Time Frame Check RSI value At 15 to 30 Level
- Then Just Take Buying Trade And Wait For Target
- If Market Is Uptrend On Daily Time Frame
- Check RSI On 5 Minut Must Be at 75 to 80 Plus
- Then just Take Selling Trade
FAQ Asked For RSI Based Intraday Trading Strategy For Option Buyer
Is RSI Best Indicator For option Buyers and Futures Trader?
Yes! RSI Is The Best Indicator For Option Buyers And Also For Future Trader Because It Show The Strength In The Market by Which You Can Easily Predict The market.
What Is Risk To Reward Ratio Of RSI Indicator Strategy?
Well The RRR For RSI Is Around 1:4 to 1:10 Its Depend on You How Much time you can Hold The Trade Or Wait For The Target.
How RSI Show The Overbought And oversold?
When The RSI Is above The upper band Which Is 60 It Shows that The price Is overbought And Come To relax Down to Lower Level or Hold,If RSI At Lower band Which Is 30 Then price IS Oversold And need To Come to Upper Side Or Hold For Some Time.
