Consider the take-profit point after the short-selling signal lights up
RCI 3 LineandBODSORUsage Examples
One of the characteristics of the three-line RCI (RCI9, RCI26, RCI52) is
“When all three RCIs line up in the same direction, the price movement in that direction tends to be larger.”
There is such a thing.
If RCI26 and RCI52 are rising (or falling) and RCI9 is falling (or rising),
when RCI9 reverses“the three RCIs line up in the same direction”is said to happen.
Therefore, it becomes very important to anticipate when RCI9 will reverse.
(Case by case, but simply waiting for the reversal of RCI9 to be confirmed often leads to a large delay.)
Hence, to detect as early as possible the moment when the momentum of RCI9’s rise (or fall) weakens
the BODSOR was developed.
The figure below shows today’s (February 21, 2018) USD/JPY 1-minute chart.
USD/JPY 1-Minute Chart
Top row:BODSOR
Bottom row: RCI 3 lines (red: RCI9, light blue: RCI26, yellow: RCI52)
Among the three RCI lines, only RCI9 is rising.
If RCI9 reverses downward, all three RCI lines could be headed downward.
In other words, prices could experience a strong decline.
In such a situation,BODSOR’s sell-on-rebound signal (yellow arrow) lights up.
(By the way, waiting for the reversal of RCI9 to be confirmed would cause a lag of one large bearish candlestick.)
After the signal lights up, the price has been moving downward steadily.
Next, we will consider profit-taking points on the lower side.
USD/JPY 1-Minute Chart(Subsequently)
Top row:BODSOR
Bottom row: RCI 3 lines (red: RCI9, light blue: RCI26, yellow: RCI52)
If you base your profit-taking timing on the shape of the three RCI lines, you might consider the following points when RCI9 moves down (red circle),
when RCI26 moves down (light blue circle), or when all three lines move down to form a so-called triple bottom (yellow square)
Is that possible?
Separately, there could be a double bottom where both RCI9 and RCI26 move downward, but in the above example, a neat double bottom did not appear.
Indicator that displays buy-the-dip and buy-on-rebound signals【BODSOR】
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https://twitter.com/RCIX3Line
Blog
http://bodsor.blog.fc2.com/
