RSI Failure Swing is a classic reversal technique where the RSI forms a higher low in oversold territory or a lower high in overbought territory.
This failure to reach a new extreme often precedes a change in trend.
The strategy buys when the RSI holds above its prior low and then crosses back above 30, or sells when it fails to exceed a prior high and crosses below 70.
A percent stop limits downside, and positions close when RSI crosses the opposite level.
- Entry Criteria: indicator signal
- Long/Short: Both
- Exit Criteria: stop-loss or opposite signal
- Stops: Yes, percent based
- Default Values:
- CandleType = 15 minute
- StopLoss = 2%
- Filters:
- Category: Reversal
- Direction: Both
- Indicators: RSI
- Stops: Yes
- Complexity: Intermediate
- Timeframe: Intraday
- Seasonality: No
- Neural networks: No
- Divergence: No
- Risk level: Medium