Advanced RSI technique - 4hr chart - Bull Signal
Updated
Saw an RSI pattern on Substratum 4hr chart which reminded me of a pattern called the "Failure Swing", which the creator of RSI - J Welles Wilder - notes in his work.
I've annotated the chart to explain what the 'failure swing' is and how it applies here.
Basically, RSI is finding higher low and price is finding lower low. If the RSI breaks above the dotted line, we have confirmation for bull signal on SUBBTC.
Currently also finding support at 50-day MA.
SUB has plenty of room to move on upside if retracement is confirmed complete by RSI.
I've annotated the chart to explain what the 'failure swing' is and how it applies here.
Basically, RSI is finding higher low and price is finding lower low. If the RSI breaks above the dotted line, we have confirmation for bull signal on SUBBTC.
Currently also finding support at 50-day MA.
SUB has plenty of room to move on upside if retracement is confirmed complete by RSI.
Note
If you can't read the annotations, here they are copied:In GREEN:
RSI 'Failure Swing': A failure swing bottom takes place when price makes a lower low but RSI fails to make a lower low and rises above the recent swing high (fail point) of the indicator triggering a buy signal.
The "fail point" is above RSI 45. One can wait for a failure swing to emerge on the charts to take more confirmed trade.
In ORANGE (left to right):
RSI low was not exceeded even though price found lower low.
'fail point' (level to surpass)
buy here for bull confirmation
Order cancelled
RSI found lower low, canceling out the Failure Swing. This is why we wait to buy until after bullish confirmation :). TA can save you money! Will continue watching -- price movements may move into a 2nd shoulder for broader H&S.
Note
Also keep in mind the Sub Beta will go live shortly. This may help trigger upward turn off current support line.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.