With the RSI oscillating above 70, the long position is held until the RSI dips back below 70, where the long position is exited.Long position is taken at the close of this candlestick and stops are placed at the low.Two candles later, the RSI 7 rises above 70.We are alerted to a potential Buy set up as the DI+ crosses above DI.Exit when RSI moves back above 30 ADX and RSI Strategy – Trading Examples.Sell on the close of the candlestick with stops at the high.Buy on the candle close with stops at the low of the candle.Once the indicators are added onto the chart, you have the following.ĪDX and RSI Strategy Chart Setup ADX and RSI Strategy Trading Rules Because, when momentum picks up in a trend, chances are that prices will continue pushing higher over a short period of time.įor the ADX and RSI trading strategy, we make use of a 20 period ADX and a 7 Period RSI. The main difference between the MACD and the RSI is that while the MACD is used to time the trade, the RSI is used to time the momentum. This allows for traders to position themselves to enter in a market where the prevailing trend is strong, confirmed by momentum. Simply put, the ADX and RSI trading indicators when used together can form a powerful way to visual the short term trends in price. When combined with the ADX Indicator, the RSI can act as a great way to compliment the trend strength. However, unlike the MACD, the RSI can be used to gauge the momentum in prices. The ADX and RSI strategy might look similar to the ADX and MACD trading strategy.

Rsi indicator pdf