Translation (preserving HTML, no line breaks, decoding entities prior to translation): From the retreating sell-off after the RCI3 super ceiling to the point of profit-taking
RCI 3-LineandBODSORusage examples
One of the characteristics of the three-line RCI (RCI9, RCI26, RCI52) is
“When all three RCIs align in the same direction, the price movement in that direction tends to be larger.”
There is such a tendency.
When RCI26 and RCI52 are rising (descending) and RCI9 is falling (rising),
if RCI9 reverses“all three RCIs line up and point in the same direction”is the situation.
Therefore it becomes very important to detect when RCI9 will reverse.
(Case by case, but waiting for a simple reversal of RCI9 to be confirmed often leads to significant delays.)
Thus, to detect as early as possible the timing when the momentum of RCI9 to rise (fall) weakens, BODSOR was developed.
The figure below is the USD/JPY 1-minute chart on February 22, 2018.
USD/JPY 1-Minute Chart
Top: BODSOR
Bottom: RCI 3 lines (Red: RCI9, Light blue: RCI26, Yellow: RCI52)
First, in the white rectangle, the RCI is in a so-called “three-top” (triple top) state.
From this RCI “three-top,” we consider the price to have topped out for now and look for a selling point on the rebound.
In the moment when RCI9 first drops and then rises again, the following situation occurs:
Among the three RCI lines, only RCI9 is rising.
If RCI9 reverses downward, all three RCI lines may move downward together.
In other words, the price may fall strongly.
In such a situation,BODSOR’s retracement sell signal (yellow arrow) lights up.
In this case, even when RCI9 drops again and then rises,BODSOR’s retracement sell signal (yellow arrow) lights up.
After the second signal, the price declines steadily.
Furthermore, consider profit-taking points.
If you think about the timing of taking profits by relying on the shapes of the three RCI lines,
when RCI9 comes down (red box),
when RCI9 and RCI26 both come down at the same time to a so-called double bottom (light blue box)
when all three lines come down to a so-called triple bottom (yellow box)
might be considered?
Indicator that displays pullback and retracement signals [BODSOR]
Twitter
https://twitter.com/RCIX3Line
Blog
http://bodsor.blog.fc2.com/
