【RCI3 Central Line + BOD SOR】USD/JPY 1-minute chart, pullback selling signal 20181026
※BODSOR is an indicator developed to improve the entry accuracy when using the three-line RCI (RCI3) for pullback buys and pullback sells.
RCI three-line and BODSOR usages
One of the characteristics of the RCI three-line (RCI9, RCI26, RCI52) is
“When all three RCI lines are pointing in the same direction, price movement in that direction tends to be larger.”
There is a case where
RCI26 and RCI52 are rising (or falling) while RCI9 is falling (or rising),
if/when RCI9 reverses“All three RCIs point in the same direction” becomes possible.
Therefore, detecting when RCI9 will reverse is extremely important.
(Case by case, simply waiting for the reversal of RCI9 to be confirmed often leads to big delays.)
Hence, to detect as early as possible the timing when the momentum of the rise (or fall) of RCI9 weakens, BODSOR was developed.
The figure below is a 1-minute chart of USD/JPY.
USD/JPY, 1-minute
Upper panel:BODSOR
Lower panel: RCI three-line (red: RCI9, light blue: RCI26, yellow: RCI52)
Among the three RCI lines, only RCI9 is clearly rising.
If RCI9 reverses downward, all three RCIs may move downward together.
In other words, price may experience a strong decline.
In such a situation,BODSOR’s pullback sell signal (yellow arrow) lights up.
From just after the signal lights up, price clearly falls.
To use the RCI three-line for pullback buying or pullback selling,
this indicator was developed to raise entry accuracy
Twitter
https://twitter.com/RCIX3Line
Blog
http://bodsor.blog.fc2.com/
