Swing Traders

This Dynamic RSI * indicator is a modified version of the "classic" RSI indicator.

It consists of 2 Bollinger Band lines which have been added, one upper line and one lower line. These lines are dynamic and their values will always be changing. These bands are here to replace the fixed overbought and oversold levels.

Once the RSI goes beyond the upper limit, it signifies that we are in an overbought situation and when it crosses the bottom limit, it means that we are in oversold situation.

In the graph one can clearly notice that the Dynamic RSI gives more trading signals then the standard RSI indicator.

A trader considers going into a long position when the Dynamic RSI leaves the lower band and enters it upwards. He consider to open a short position leaves the upper band and reenters it some days later.

As a swing trader is quite a cautious trader, he will look for some confirmation. If he considers going long, he will definitely wait untill the stock goes higher. He places a stop buy order above the close of the preceding day.

• Phase 1: The trader spots an oversold signal.
• Phase 2: The trader puts a stop buy order, slightly above the high of the preceding period.
• Phase 3: The stock goes up and triggers the stop buy order.

If the traders considers going short, he will also wait untill the stock goes lower. He places a stop sell order underneath the low of the preceding day.

• Phase 1: The trader spots an overbought signal.
• Phase 2: The trader puts a stop sell order, slightly underneath the close of the preceding period.
• Phase 3: The stock goes down and triggers the stop sell order.

 * The Dynamic RSI is not included in the free demo tradingplatform WHS ProStation. The code can be download on the Chartstudio website.

How to screen for bullish of bearish signals?

On the chapter Stockscreens an actual list of stocks of the FTSE 100, Nasdaq 100 and S&P 100 can be found with bullish & bearish signals.

Included in the  free demo tradingplatform WHS ProStation a powerful stockscreener WHS Techscan is included and scans more than 15 stockmarket for various signals as the MACD, Parabolic SAR, RSI, Stochastics, Dynamic RSI.

Some screenshots of the WHS Techscan below. Click to enlarge.