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