【RCI3 One Line + BODSOR】AUD/JPY 5-minute chart Retracement Sell Signal 20181027
※BODSOR is an indicator developed to improve the entry precision when applying buy-the-dips or selling into a pullback using the RCI triple-line.
It is an indicator developed to enhance entry accuracy when using the RC I triple-line for buying on dips or selling into pullbacks.
RCI Three-LineandBODSORapplications
One of the characteristics of the RCI three-line (RCI9, RCI26, RCI52) is
“When the three RCIs are aligned in the same direction, price movement in that direction tends to be larger.”
There is this tendency.
When RCI26 and RCI52 are rising (falling) and RCI9 is falling (rising),
if RCI9 reverses,“the three RCIs align in the same direction”becomes the case.
Therefore, detecting when RCI9 will reverse is extremely important.
(Case by case, but simply waiting for a confirmed reversal of RCI9 often results in being late.)
Hence, BODSOR was developed to detect as early as possible the timing when the momentum of RCI9 to rise (or fall) slows down.
This is the purpose of BODSOR.
The figure below is the AUD/JPY 5-minute chart.
AUD/JPY 5-minute chart
Upper panel:BODSOR
Lower panel: The RCI three-lines (red: RCI9, light blue: RCI26, yellow: RCI52)
Among the RCI three-lines, only RCI9 is clearly rising.
If RCI9 reverses downward, all three RCIs may trend downward.
In other words, there is a possibility of a strong price decline.
In such a situation,BODSORs Reversal Sell signal (yellow arrow) lights up.
Immediately after the signal, seven consecutive bearish candles occur, and the price declines smoothly.
In this example, the candle confirming the reversal downward of rising RCI9 two candles before the confirmation lights up the sell signal.
In this example, the sell signal is confirmed at the moment the candle confirming the reversal of rising RCI9 two candles prior to its confirmation appears.
Therefore, the sell signal is confirmed when the candle confirming the reversal of RCI9 appears two candles before.
RCI three-line-based entry signals for buying on dips or selling into pullbacks
to improve entry accuracy
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