I like the analogy Sam. Things are always in a state of ebb and flow, action and reaction, buy and sell, so whenever out on the edge there's a "gravity" to pull back towards centre.MurphyMan wrote:A little trick I learned from the late great David Elliott a.k.a. First Wave. Think of the RSI2 as a rubber band, that gets stretched out. You want it to be stretched as far as possible, so when released it "Snaps Back Up", or "Snaps Back Down".pips400 wrote: The important thing is that the RSI2 TMA 4H is "pinned" first. That means either right at the top or right at the bottom. The reason is that with the RSI2 is pinned you're getting into the trade at the optimum point. If RSI2 is not pinned price can retrace further which means greater DD and stress! That's why Jem says to wait for a good retrace, otherwise if we're not patient it's possible to place the trade too early. So after the retrace then we're looking to the CSS colour change for the entry. If you're an aggressive trader you can place the trade soon if the CSS lines are converging and you are confident.
So when looking through the charts at review time, the first thing I look for is the Snap Back Up or Snap Back Down condition.
Sam
