RSI Swing Failure Indices Trading Setup
RSI indices trading swing failure can be a very accurate method for trading short term indices trading moves. It can also be used for trading long term indices trends but it is best suited for short term indices trading especially for those indices traders that trade reversals.
The RSI swing failure swing stock indexes trading setup is a confirmation of a pending stock indices market reversal. This indices trading swing failure setups a leading breakout signal, it warns that a support or resistance level in the stock indexes trading market is going to be penetrated. This stock indexes trading setup should occur at values above 70 for an upward indices trend and values below 30 in a downward indices trend.
Swing Failure In an Upward Indices Trend
If the indices trading RSI Indices Indicator hits 79 then pulls back to 72, then rises to 76 and finally drops to below 72 this is considered a failure swing indices trading RSI setup. Since the 72 level is an RSI support level and it has been penetrated it means that stock indexes price will and follow and it will penetrate its support level.
In the stock indexes trading example explained and illustrated below, the indices trading RSI indicator hits 73 then pulls back to 56, this is a support level. The stock indices indicator then rises to 68 and then drops to below 56, thus breaking the support level. The stock indexes price then follows afterwards breaking it support level. The indices trading RSI swing failure is a leading stock indices signal and it is confirmed when stock indexes price also breaks it support level. Some indices traders open trades once the swing failure is complete while other indices traders wait for stock indexes price confirmation, either way it is for a indices trader to decide what work best for them.
Indices RSI Swing Failure Setup in an Upward Indices Trend
Swing Failure In a Downward Indices Trend
If the indices trading RSI Indices Indicator hits 20 then pulls back to 28, then falls to 24 and finally penetrates above 28, this is considered a failure swing setup. Since the 28 level is an RSI resistance level and it has been penetrated it means that stock indexes price will and follow and it will penetrate its resistance level.
Indices RSI Swing Failure Setup in a Downward Indices Trend