Summary of Trading RSI with Andrew Cardwell and the Wyckoff Trading Method - 2.01.19

In the video titled "Trading RSI with Andrew Cardwell and the Wyckoff Trading Method," Andrew Cardwell, known as "Dr. RSI," discusses his unique approach to trading using the Relative Strength Index (RSI) and introduces his Cardwell RSI Edge methodology. The session is hosted by Bruce Frazier and aims to provide insights into RSI trading strategies, market analysis, and the importance of understanding market trends.

Main Financial Strategies and Concepts Presented:

• Cardwell RSI Edge Method:
  • Focuses on using RSI for trend analysis and Price Forecasting rather than just overbought or oversold signals.
  • Introduces the concept of "overextension" instead of traditional overbought/oversold levels.
• Range Rules:
  • Traditional RSI levels of 70 and 30 are adjusted to 80 and 40 for better accuracy in identifying market conditions.
  • Emphasizes the importance of understanding the trend direction and using moving averages in conjunction with RSI.
• Divergence Analysis:
  • Differentiates between bullish and bearish divergences, explaining that they are not necessarily reversal signals but indicators of overextension.
  • Provides a systematic approach to identifying divergence patterns and their implications for future price movements.
• Price Forecasting:
  • Discusses how to project future price movements based on momentum discrepancies between price and RSI.
  • Highlights the significance of setting target prices based on RSI analysis.
• Market Conditions:
  • Advises traders to consider multiple timeframes for a comprehensive market view.
  • Suggests using sentiment analysis through RSI to gauge trader behavior in the market.

Methodology/Step-by-Step Guide:

• Calculate RSI: Initially calculated by hand, now can be done using software.
• Identify Range Rules: Use adjusted levels (80 and 40) to determine market conditions.
• Monitor Moving Averages: Utilize a 9-period moving average of RSI to confirm trends.
• Recognize Divergence Patterns: Identify bullish and bearish divergences and understand their implications.
• Set Price Targets: Use momentum analysis to establish future price targets based on RSI readings.

Presenters/Sources:

• Bruce Frazier (Host)
• Andrew Cardwell (Presenter, Dr. RSI)

Notable Quotes

— 21:28 — « Trading should be fun; you shouldn't stress in your trading. If you're stressing while you're trading, then you don't know what you're doing. »

— 27:03 — « The best sell signals are failed buy signals. »

Category

Business and Finance

Video