RSI Swing Failure Setup

RSI swing failure can be a very accurate method for trading short term Indices moves. It can also be used for long term trends but it is best suited and fitted for short term Indices especially for those traders that trade reversals.

RSI swing failure swing trading setup is a confirmation of a pending market price reversal. This swing failure setups a leading break out signal, it warns that a support or resistance level in the market is going to be penetrated. This setup should occur at readings above 70 for an upward trend & readings below 30 in a downwards trend.

Swing Failure In an Upward Trend

If the Indices RSI Indicator hits 79 then pulls back to 72, then rises to 76 and finally drops to below 72 this is considered a failure swing RSI setup. Since the 72 level is an RSI support level and it has been penetrated it means that price will and follow & it'll penetrate its support level.

In the illustration put on display below, Indices RSI indicator touches 73 then pulls back/retraces to 56, this is a support level. The indicator then rises to 68 & then drops to below 56, thus breaking the support level. The price then follows afterwards breaking it support level. The RSI swing failure is a leading trading signal and it's confirmed when price also breaks it support level. Some traders open trades once the swing failure is complete while other Indices traders wait for price confirmation, either way it's for a trader to decide what method works best for them.

How Do You Trade RSI Swing Failure Setup In an Upwards Trend & Swing Failure In a Downward Trend?

Index RSI Swing Failure in an Upward Trend

Swing Failure Setup In a Downwards Trend

If the Indices RSI Trading Indicator touches 20 then pulls back/retraces 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 and it has been penetrated it means that price will and follow & it'll penetrate its resistance level.

How Do You Trade RSI Swing Failure Setup In an Upwards Trend and Swing Failure In a Downwards Trend?

Indices RSI Swing Failure Setup in a Downward Trend

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RSI Swing Failure Setup

Swing Failure In an Upward Trend

Swing Failure Setup In a Downwards Trend