RSI Sadukey Breakout Forex Trading Strategy

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RSI Sadukey Breakout Forex Trading Strategy

The forex market moves in cycles, waves and trends. As such, traders who understand how cycles, waves and trends move have an upper hand when trading the forex market. They could trade with the trend for higher probability trade setups or trade trend reversals for high yielding trades. They would also know if the market is ranging or erratic and could decide whether it is worth to trade in that type of market.

Because the forex market moves in trends and waves, it is very important for traders to learn how to observe trendlines. It gives them an idea whether the market is continuing its current trend or if it is reversing. Then, they could apply the correct strategy for that current market scenario.

RSI Sadukey Breakout Forex Trading Strategy trades on trend reversals coming from breakouts of a support or resistance level. This strategy could be used whenever traders see a probable trend reversal based on a break from a trendline. Trade setups are then confirmed by a confluence of custom indicators giving the trade setup a higher probability of becoming a profitable trade.

RSI Filter

RSI Filter is a custom oscillating indicator which detects trends and trend reversals. This indicator is a combination of the Relative Strength Indicator and a moving average line.

The RSI is traditionally used as momentum indicator. Traders identify a bullish momentum whenever the RSI line stays above 55 and a bearish momentum whenever it stays below 45. Other traders simply identify trend based on where the RSI line is staying in relation to its level 50.

Although this is not the main purpose of the RSI line, it could also be used to identify oversold and overbought conditions. Some traders mark these conditions at 20 and 80.

This indicator however uses a free moving RSI line and a Smoothed Moving Average (SMMA) line. Trade signals are generated whenever the RSI line crosses over the SMMA line. Trends are confirmed whenever the RSI line stays on one side of the SMMA line.

Sadukey Indicator

Sadukey is a trend following indicator designed to detect trends and trend reversals by displaying bars on the price chart.

During a bullish trending market, the indicator displays red bars plotted below the price candles, while during a bearish trending market, the indicator displays blue bars plotted above the price candles.

This indicator is very accurate and has a good balance between being responsive and not being susceptible to price spikes.

As with most trend-following indicator, this indicator works best in a trending market condition or in conditions where there is a high chance of a new trend starting.

Trading Strategy

This trading strategy provides trade signals based on a breakout from a diagonal trendline, which could either be a support or resistance line.

As soon as a diagonal trendline is clearly observable on the price chart, we would wait for a confluence of a breakout and the signals coming from the two indicators above. Trend reversal trades tend to work out well whenever these three factors align.

On the RSI Filter indicator, the RSI line should cross over the SMMA line towards the direction of the breakout. The Sadukey indicator should also change color indicating a trend reversal in the direction of the trendline breakout.

Indicators:

  • Sadukey (default setting)
  • rsi filter (default setting)

Preferred Time Frames: 1-hour and 4-hour charts

Currency Pairs: major and minor pairs

Trading Session: Tokyo, London and New York Sessions

Buy Trade Setup

Entry

  • A diagonal resistance line should be clearly observable on the price chart.
  • On the RSI Filter, the RSI line should cross above the SMMA line indicating a bullish trend reversal.
  • The Sadukey indicator should change to color red indicating a bullish trend reversal.
  • Price should break and close above the resistance line.
  • These bullish signals should be closely aligned.
  • Enter a buy order on the confirmation of the conditions above.

Stop Loss

  • Set the stop loss a few pips below the entry candle.

Exit

  • Close the trade as soon as the Sadukey indicator changes to blue.

RSI Sadukey Breakout Forex Trading Strategy

RSI Sadukey Breakout Forex Trading Strategy 2

Sell Trade Setup

Entry

  • A diagonal support line should be clearly observable on the price chart.
  • On the RSI Filter, the RSI line should cross below the SMMA line indicating a bearish trend reversal.
  • The Sadukey indicator should change to color blue indicating a bullish trend reversal.
  • Price should break and close below the support line.
  • These bearish signals should be closely aligned.
  • Enter a sell order on the confirmation of the conditions above.

Stop Loss

  • Set the stop loss a few pips above the entry candle.

Exit

  • Close the trade as soon as the Sadukey indicator changes to red.

RSI Sadukey Breakout Forex Trading Strategy 3

RSI Sadukey Breakout Forex Trading Strategy 4

Conclusion

Trend reversal strategies based on breakouts of supports and resistances are one of the most basic trading strategies.

Many technical traders have profited from this type of strategy because it allows traders to gain a lot of pips on successful trades. In a way, this strategy is a high yield type of strategy.

However, some traders who have not mastered trading trend reversals would find it difficult to trade the correct trend reversal setups.

This strategy helps traders identify higher probability trend reversal setups by using two indicators which could complement the classic trend reversal breakout strategy. Traders could now identify trend reversal breakouts that has momentum behind it using the two indicators above.

The critical skill that traders should develop when using this strategy is drawing the correct trendlines. Once you get this skill developed, you could start earning much from this strategy.


Forex Trading Strategies Installation Instructions

RSI Sadukey Breakout Forex Trading Strategy is a combination of Metatrader 4 (MT4) indicator(s) and template.

The essence of this forex strategy is to transform the accumulated history data and trading signals.

RSI Sadukey Breakout Forex Trading Strategy provides an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.

Based on this information, traders can assume further price movement and adjust this strategy accordingly.

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How to install RSI Sadukey Breakout Forex Trading Strategy?

  • Download RSI Sadukey Breakout Forex Trading Strategy.zip
  • *Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /
  • Copy tpl file (Template) to your Metatrader Directory / templates /
  • Start or restart your Metatrader Client
  • Select Chart and Timeframe where you want to test your forex strategy
  • Right click on your trading chart and hover on “Template”
  • Move right to select RSI Sadukey Breakout Forex Trading Strategy
  • You will see RSI Sadukey Breakout Forex Trading Strategy is available on your Chart

*Note: Not all forex strategies come with mq4/ex4 files. Some templates are already integrated with the MT4 Indicators from the MetaTrader Platform.

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