The EUR/USD currency pair on Daily Chart has been in a very narrow range for almost 2 months now. RSI 6 period has not been with values above 70 and below 30 for over a month. STS_RSI_MTF_Indicator shows values of about 50 (Daily) and 43 (Weekly), which means lack of direction. However, we notice that the Monthly RSI is 30, which means the market on the Monthly Chart is rather oversold. The probability for breakout of the range increases with each passing day.
In such situations, we use our STS_RSI_Breakout_Bot ,which is designed to open positions in case of a range break. It opens long positions when RSI is overbought and short positions when RSI is oversold.
In this case, the probability of breaking the range up is higher due to the value of 30 on the RSI Monthly Chart, but it is still possible to see a break down. Therefore, we will load our Trading Robot twice on two separate charts. One Bot will wait for a break of the range up, another Bot will wait for a break of the range down.
The first Bot is loaded to wait for long positions if the price breaks the level of 1.1400 (Up level of the Range) and RSI is above 70. The target is 300 pips, and the Stop Loss is RSI again, but with а value bellow 30. Stop Loss on RSI means that if we have an opened long position at RSI 70, the Bot will close the position if the RSI falls below 30, regardless of whether the position is at profit or loss. If the position is profitable and RSI falls below 30 before reaching the target of 300 pips, the Bot will close it. This way we protect the already accumulated profit and capture the maximum from the directed movement.
The second Bot is set to wait for short positions if the price breaks the level of 1.11851 (Down level of the Range) and RSI is bellow 30. The target is 300 pips, and the Stop Loss is RSI again, but with a value above 70. Stop Loss on RSI means that if we have an opened short position at RSI 30, the Robot will close it if RSI rises above 70, regardless of whether the position is at profit or loss. If the position is profitable and RSI rises above 70 before reaching the target of 300 pips, the Bot will close it. This way we protect the already accumulated profit and capture the maximum from the directed movement.
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