SWING TRADING
RSI & BOLLINGER BANDS
BHARAT JHUNJHUNWALA
CMT,CFTE,MFTA,MSTA
📈 RSI & Bollinger Bands Swing Trading Strategy: Conquering Counter-Trend Moves
Dynamic Duo: Combine RSI (Relative Strength Index) and Bollinger Bands for a
powerful swing trading strategy.
Focus: Counter-trend swings for high-probability trades. 🎯
RSI Signals:
Overbought/Oversold: Use RSI to spot potential reversal zones.
Divergence: Identify hidden momentum shifts that precede trend changes. 👀
Bollinger Bands Setup:
Look for: EXPANSION within the bands, indicating HIGH volatility.
Entry: Trade the bounce off the bands, aiming for a return to the mean.
Pro Tip: Use different look-back periods for RSI and Bollinger Bands to fine-tune
your entries and exits.
📈📉 Mean Reversion Trading: Riding the Wave Back to the Average 🌊
Mean Reversion: Prices tend to return to their average after extreme moves.
Triggers: Deviations from moving averages or consolidation zones.
The "Mean": Can be a moving average or any key support/resistance level.
Bollinger Bands: Help identify when a stock is overextended.
RSI: Signals momentum breakdowns.
Moving Averages: Potential profit-taking zones.
Expansion Cycle
Contraction Cycle
It is not necessary
that every expansion
will lead to mean reversal
Overbought ≠ Weak! 📈 How to Spot Hidden Reversals with RSI Divergence 🕵️♂️
Overbought is Strong: Overbought conditions (RSI > 70) mean a trend is
powerful, not weak.
Momentum Breakdown: Look for a crack in momentum, NOT just overbought
levels.
RSI Divergence as a Signal: The most effective way to spot weakening
momentum.
The Perfect Setup:
Price above the upper Bollinger Band.
RSI above 70 (or 75 for stricter confirmation).
RSI forms a lower high while price makes a higher high.
Pro Tip: Adjust RSI lookback period for earlier entries.
🎯 The Ultimate Breakout Trap: Catching Reversals with RSI Divergence & Bollinger
Bands 🎯
Overbought Conditions: Identify when the market is overheated using RSI &
Bollinger Bands.
Momentum Breakdown: Look for RSI divergence to confirm weakening momentum.
Candlestick Trigger: Wait for a bearish candlestick to puncture the upper Bollinger
Band.
Re-Entry Confirmation: If price falls back into the band, it confirms a "trap" and
signals a short entry opportunity.
Trade Setup:
Short: Below the bearish candlestick.
Stop Loss: Above the candlestick high.
Target: Middle Bollinger Band.
Disclaimer: Traders should refrain from anchoring their future expectations solely on past performance when making investment decisions.
Do we trade here?
THE SETTING
www.prorsi.com
+91.9748173333
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Bharat Jhunjhunwala
contact@prorsi.com
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