Student’s Question:Would you elaborate using a chart (if possible) on how to use an indicator (RSI preferably) to time an entry when using a Range Trading strategy?Thanks.Instructor’s Response:Certainly…Remember that when trading a range, we want to buy (go long) at support and sell (go short) at resistance. So, when the pair is trading at resistance, the top of the range, we know that we plan to short the pair. To time the entry, we would look for the RSI, ideally, to be above 70. When the RSI breaks below 70 and closes below 70, that would be our opportunity to short the pair.
To go long at support we would wait for the RSI to close above 30 for our opportunity to buy the pair.Take a look at the historical chart of the EURCAD below for a visual on this strategy…
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