This weekly chart below shows how I’m stalking the NZDUSD pair.
I’ve set up alerts on Tradingview to tell me if/when price falls below 20 on the RSI. If that happens I’ll then make an assessment on whether I enter a trade.
A lot of people out there have already gone long on this pair. A lot of people often get it wrong. I could see why they might go long – and they could well be right. But this business is not about being right – it’s about being profitable. Many are getting in now thinking that price is in a band of support. But I think it’s too early to say that price will reverse and go north. I think the risk is too high to go long now, because of the heavy downward momentum.
I’m waiting to see if that RSI gets below 20, at which point there would be better certainty of a price reversal.
Of course if the price suddenly decides to head north before the RSI gets ripe, then I’ve missed this one. The alternative is to jump in now and take a much larger risk with a much bigger stop-loss. But I don’t intend to catch all the ‘fish’ in the net. All I’m doing is setting the net widely and hoping to catch a few big ones at acceptable risk.