Discussing the article: "From Novice to Expert: Trading the RSI with Market Structure Awareness"
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Check out the new article: From Novice to Expert: Trading the RSI with Market Structure Awareness.
In this article, we will explore practical techniques for trading the Relative Strength Index (RSI) oscillator with market structure. Our focus will be on channel price action patterns, how they are typically traded, and how MQL5 can be leveraged to enhance this process. By the end, you will have a rule-based, automated channel-trading system designed to capture trend continuation opportunities with greater precision and consistency.
Bullish and bearish flags represent a consolidation of momentum within a strong trend. While traditionally viewed as simple continuation patterns, their true value lies in the specific momentum behavior exhibited within their channel boundaries. The conventional breakout-and-retest approach, though logical, systematically surrenders a substantial portion of the ensuing move.
Our methodology refines this by targeting the precise moment within the consolidation where the trend's underlying strength reasserts itself, using a powerful confluence of structure and momentum.
The Anatomy of a Reliable Flag
Bullish Flag: Forms in a strong uptrend. It consists of a sharp, near-vertical flagpole (the initial impulsive move), followed by a downward-sloping or rectangular consolidation channel. The pattern is valid only if the consolidation does not retrace beyond the start of the flagpole.
Author: Clemence Benjamin