【RCI3 single line + BODSOR】 Euro/Swiss Franc 4-hour chart Retracement selling signal 20181028

※BODSOR is an indicator developed to improve the entry accuracy when making pullback buying or pullback selling using the RCI 3-line.




RCI 3-line and BODSOR usage examples

One of the characteristics of the RCI 3-line (RCI9, RCI26, RCI52) is

“When all three RCI lines are pointing in the same direction, the price movement in that direction tends to be larger.”



If RCI26 and RCI52 are rising (falling) and RCI9 is falling (rising),
when RCI9 reverses“all three RCI lines point in the same direction” becomes a possibility.

Therefore, detecting when RCI9 will reverse is extremely important.

(Case by case, but simply waiting for a definite reversal of RCI9 often results in significant delay.)


Hence, BODSOR was developed to detect as early as possible the timing when the momentum of upward (downward) movement of RCI9 begins to weaken.



The figure below is the EUR/CHF 4-hour chart.

EUR/CHF 4-hour chart

Upper panel:BODSOR
Lower panel: RCI 3-line (red: RCI9, light blue: RCI26, yellow: RCI52)

Among the three RCI lines, only RCI9 is clearly rising.
If RCI9 reverses downward, all three RCI lines could align to decline.
In other words, the price could undergo a strong decline.

In such a situationBODSOR shows a pullback selling signal (yellow arrow).

Immediately after the signal lights up, two solid bearish candles occur in succession, as can be seen.




An indicator developed to improve entry accuracy when using the RCI 3-line for pullback buying or pullback selling



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