RSI Crypto Trading Strategy — Step-by-Step Guide & Transcript

[00:00] In the past two weeks, I've made a total of 13 trades and I made a total profit of $5,771. In today's video, I'm going to be sharing the exact strategy that I use to make these trades,

[00:13] so if that doesn't stink, definitely stick around. All the things I talk about will be linked down below in the description, but there are five things that you need to know first. The first thing you need to know is that this strategy does not require you to learn any sort of trading pattern.

[00:26] Second of all, you will need a TradingView account. It's free to sign up, but if you want to access more features, then you will have to pay. Third, you will need a dedicated trading account. Your holding portfolio and your trading account should be separated and you should never mix the two.

[00:41] The two that I personally use are Pionix and Kukorn. I do have links down below if you're interested in signing up. Fourth is you will need something called Deluxe Algo. Now, it's not mandatory, but you'll see why throughout the entire video.

[00:53] It's better having it than not having it. As a full disclosure, they are a partner of this channel. I am an affiliate with them. I love using their indicator and highly recommend it to most people who are trading on a regular basis. You can always try it out for a month and if you like it,

[01:07] you can always go for the lifetime deal. For me, it's never about how much it's going to cost, but how much it's going to make me. And the fifth thing you need to know is that I'm not a financial advisor nor anything that I share in this entire video. Financial advisor, make sure

[01:19] you do your own research and due diligence before you make any sort of trading and investment decision. Now, this strategy is called the RSI strategy. Now, it's a strategy that I personally used for years and it actually helped me get out of debt. For most people, I actually don't

[01:33] recommend trading just because it can be an emotional roller coaster and most people lose trading. That is why I always encourage people not to use more than 5% to 10% of your entire portfolio. So, for example, if you have a $10,000 portfolio, you should only be trading with $500

[01:48] to $1,000. That way, you're not going to be constantly glued to your phone all the time I mean, it's not a life-and-death situation. This is a strategy that my team and I were currently working on. So if you're interested in learning more about the strategy and you want to follow my trade,

[02:00] what I buy, what I sell, my interest prices, my exit prices, definitely check out the Patreon group link down below. Now, the goal of this strategy is not to make a 10%, a 20%, or a 50% type of gain. Instead, you're trying to make small gains

[02:14] consistently time and time again. We're talking about 2% to 3% wins over and over and over again. For example, if you make a 2% win, it may not seem that great, right? But if you do that 35 times, well, you've doubled your portfolio.

[02:28] A 3% win may not seem that impressive, right? But you do that 24 times, well, you've made a 100% gain. In other words, you've doubled your account. Now, the first thing that you're going to have to do is choose a cryptocurrency that you want to trade of your choice.

[02:41] You do not have to trade like 10 different cryptocurrencies. You just need to stick with one that you understand and trade that consistently. For this entire video example, I'm going to choose a cryptocurrency called ROSE or Oasis Network.

[02:54] This is a cryptocurrency that I personally understand and I think it'd be a really good example for this entire video. Now, the first thing you're going to have to do is click on indicators up here and then type in RSI. Relative Strength Index should pop up. You're going to go ahead and click on that.

[03:06] And this chart on the bottom should show up. Now, this trading strategy requires you to be either on the 5-minute, the 10-minute, or the 15-minute time frame depending on which time frame you personally want to trade on.

[03:18] For this video example, I'm going to actually stick with the 5 minute time frame. So the basic idea of this strategy is any time the R side dips 30 or below, you enter into a trade. So right over here, we would have entered a trade.

[03:30] Right here as well. This reached only to like 33, 34. Could we have entered? Maybe. And right over here as well. And another one right here. And then you going to exit out of your position before it hits 70 Typically when we hit 70 that is when it overbought but the goal of this strategy is to get out before it hits 70 So we talking about 60 to be very conservative

[03:52] We can't time bottoms, we can't time tops, but there's a lot of opportunity in the middle. And typically what we're looking for is anywhere between a 2 to 3% gain. So aiming for a 2.5% gain is not a bad idea as well. So I've measured out all the opportunity there would have been in

[04:07] the past 20 hours. So there was a 1.5% opportunity here, 2.5%, 3, 2.8, 4%, and a 2.2 currently. Now in hindsight, when you look back, it's really easy to be like, oh, if you entered here, you would

[04:20] have made this percent. If you entered here, you would have made this many gains. Because when you look at the chart, we have no idea what the next 20 hours are going to look like. It's easy to say what happened. It's very hard to say what's going to happen. So the question is, how do you know

[04:34] when to enter, right? What if you enter in too late? What if you enter in too early? Well, that is where the Lux Algo comes in. I'm going to click on show. And here is what's great about the Lux Algo. There are times when I'm kind of like, should I enter? I could enter, but is it a good

[04:48] time to enter? But when the buy signal turns on, that's typically a great time or confirmation to me to enter into a trade. And the thing about trading is that you don't have to stay in front of your computer and just watch the charts and try to monitor the price. The idea of trading is

[05:02] just to enter when you see an opportunity and exit when the opportunity is right. Now, we're actually going to go backwards and see previous data to kind of give you an idea of how I would enter a trade and how I would exit a trade.

[05:14] Now, if you go ahead and double-click on sell or buy, you'll see the settings pop up. If you go to signal mode, by default, it's going to be on confirmation. I switch mine over to contrarian. And the signal sensitivity is going to be at 12 by default.

[05:26] I'm going to keep it at 12. So here's how I usually enter a trade. Sometimes a buy signal will show up, but the RSI is not hovering in the 30 ranges. Therefore, I ignore this buy signal and it is not valid. But there are times where

[05:39] the buy signal will pop up and the RSI is in the 30 range. Therefore, I would enter a trade. Now the moment I enter each trade, let's say I entered around here, I'm aiming for about a 2 to 3 percent gain. And once my trade is up around 2 to 3

[05:53] percent, I exit the market to lock in profits. And then I wait for the next opportunity so maybe the market's trending downwards oh we got a buy signal but the RSI still not in the 30 ranges so I wait the market goes lower great we got a buy signal plus the

[06:08] RSI is in the 30s or dip below 30 that is a time to enter the trade let's say your goal is to make a two percent win well you can set a limit order up here locking your profits and yes there are

[06:20] times the market will still trend higher a little bit more but you're not going to chase and you're just going to wait. Now let's play out some other scenario as well. So we got another buy signal, and the R5 sitting, you know, at 33. That to me is a valid trade. So I would enter a trade right

[06:34] there. Now what happens if you enter a trade and it does not hit your sell target? So the market only went up a total of 1.5%. We did get a sell signal, so technically you could have sold out of your position, but what if you didn't because you wanted to make a 3% gain? And then the market

[06:49] dipped. Well, this is where the next part comes in, and that is that when you enter a trade, You're not going to enter with your entire account. So for example, if you're trading with $1,000, you're not going to enter the whole $1,000 here.

[07:01] You're going to enter in sections because you want to make sure that you have cash on hand. So typically for myself, I like to enter into a trade with 25% to 30% of my account. For example, I would enter about one-fourth of my cash position right over here.

[07:15] If the market dips, I got a strong buy signal, the RSI dipped below, I would enter another trade right here. So my other 1 fourth position is right here and now my average entry cost is somewhere around here So right now half of my cash position is in a trade and half is not Could you have entered another one fourth over here You could have but for me I probably wouldn have just

[07:35] because I wanted to hold on to some cash and now that because you have a lower average you can either sell at a break even and wait on the silence for the next opportunity or you could you know continue your goal and make a two percent gain lock it in or a three percent gain it is

[07:49] completely up to you. Obviously this entire move up was about a 4.5 percent move but again we don't know where the top is so we're trying to be conservative and then consistently aim for a two to three percent gain. Now we're going to go ahead and switch over to the 15 minute time frame to

[08:03] give you a different perspective on how to do these trades. Now the difference between trading on a five minute time frame and a 15 minute time frame is going to be the amount of time you're going to hold on to your position. So if you're trading on the five minute time frame well you're

[08:15] trying to enter and set out of your position within one or two days. On the 15 minute time frame you're holding on to your position just a little bit longer. Now personally for myself I really likes the 15 minute time frame. So we have a great example right here. You know, we got a

[08:28] giant dip, the RSI dipped below 30, and we got a strong buy signal. You could have entered right around here, and instead of aiming for a 2 to 3% gain, because the time frame is a little bit longer, you would increase that to 3 to 5%. And so you could have sold at a 5% gain instead.

[08:45] Obviously, the market went a little bit higher, but we're aiming for 5% max. And then another one, we got a buy signal plus the RSI went down below. So let's just say we entered a little bit higher around here. You were up around 3%, then you went minus a little bit, but eventually the market went

[08:59] up and you could have sold at a 5% gain. And then what happened with Rose afterwards? Well, Rose kept going higher and higher and higher. This is why we trade with a small portion of our portfolio because sometimes the market could go higher. And in those incidences,

[09:12] we are writing up our holding portfolio. I trade Rose, but I also hold Rose in my holding portfolio where I do not touch. That way, when the market does continue higher, I feel like I haven't missed out. At least I'm holding on to some cash and I'm consistently increasing my cash position through

[09:28] these trades. If the market decides to dip like 50%, well, at least I'm still holding on to some cash in my trading portfolio. Now, if you want to make more longer term trades without using the RSI strategy, let's get rid of it and we switch over to the one hour time frame. Well, the one

[09:44] hour time frame is a much bigger time frame than the 15 minute time frame. Therefore, the amount of profit you can take is going to be higher. Instead of aiming for 2-3% gains or 3-5% gains, now you can aim for anywhere between 7-10% gains with the one hour time frame. And these numbers

[10:00] that I share are specifically for rows based off of my own analysis and study on the Lux Algo. Whatever cryptocurrency you decide to trade, what you're going to have to do is you're going to have to look back at previous data to help you figure out future behavior of that cryptocurrency. For

[10:16] For example, we got the first buy signal here. Yes, the market went lower, you have to be able to stomach these volatilities, but if you held on and sold at the first sell signal, well, that's a 10% gain. Same thing, we got a buy signal down here, first sell signal came up, that's about an

[10:31] 11% gain. Next buy signal came around here, we went down about 4%, went back up, sell signal came up, 10%. Next buy signal we got down here, and then we could have sold up here for about a 10% gain again. If you for some reason did not sell, the market went lower, well, at least you could have

[10:45] on the next sell signal at 15%. So if you follow this exact strategy using your Lux Algo, well, in the past two weeks, you would have made a total of four trades and you would be up more than 40%.

[10:57] This is a compound interest calculator, but we can actually use it to calculate trades as well. So we have a $10,000 account. We made four trades total. And each time you made a 10% gain. Well, your account will now be up 46 versus let just say you decide to buy hold Let say you bought right down here and you to hold up here you currently be up around 15 of course could have gone as high as 26 but that if you sold and locked in profits

[11:24] but because we didn't sell well yeah it's gonna be about 15% if we just make three more 10% trades then you've almost doubled your account and the reason why your account size is going to grow exponentially after every win is because

[11:37] every time you win a trade, you're going to re-enter a trade with those profits. And once you make profits from your trade, then you're going to grab your profits plus your previous profits and enter a new trade. And you get the idea, right? Every time you win a trade,

[11:49] you're using your profits to make more profits. So the purpose of this entire strategy is not for you to make like these 20, 30, 40% gains. It's to have a consistent win rate. Because if you could have a 90 to 100% win rate with a $1,000 account, imagine how much that will grow

[12:05] when you have a $100,000 account. If I can win 100% of my trade with my current account, if I have a million dollar account, that's gonna be crazier. So you're developing and you're sharpening your trading skills through this strategy.

[12:17] Once you become more familiar with it, then you can explore patterns and you can explore other types of trading strategies. But this is what I personally enjoy on these shorter timeframes. And then there's something called the trend tracer and trend catcher. I like using the trend catcher when I do trades

[12:31] and trend tracer for macro view of the market. For example, if I click on Trend Tracer, it'll give you a general idea which direction the market is going. So right now, we're on green. Therefore, I'm going to assume that we're going to be in a very slow uptrend.

[12:44] But how do we know if it'll continue upwards? Well, that's when we turn on the Trend Catcher. And what's great about the Trend Catcher is that it sometimes lets us know which direction the market will go before it goes that way. So for example, if we go to Rose and we actually go to this peak over here,

[12:59] it turned red and it actually warned the market that it's going to trend lower. Anytime the trend catcher turns like green, red, green, red, green, red, that to me just indicates that the market is consolidating. But if we're in a continual uptrend and it turns red, well, it's time to exit out.

[13:15] Anytime we're in a consistent downtrend and we start to see some green, well, it's time to enter back in. So using both the trend tracer and catcher, having them both on is never a bad idea as well. Now when it comes to this trading strategy, it works well if you have a larger account.

[13:29] If you have a $1,000 account, it's going to be very difficult to make $100 a day. Why? Because you have to make a 10% gain every single day and that's very, very difficult in a regular cryptocurrency market. I do not use leverage and do not recommend it because that's how you can get your entire account wiped out.

[13:44] Instead, your goal should be to build up a larger cash position. That way, when you make a 2-3% gain, your gains are going to be much greater in dollar terms. For example, on my very first trade, it was about a $19,000 trade.

[13:57] This was about a 4% gain, so $734 in profit. This one was an $8,000 entry, and this was only about a 3% gain. So a 3% gain on a $8,000 trade is $250.

[14:10] So that's why this strategy is much more effective when you have a larger account. Now, if your goal is not to make $100 a day, it might just be to make $10 a day, a $30 a day. That's totally fine as well. Because if my goal was just to have a consistent win rate, well, every time I get paid for my job,

[14:26] I would move over a certain percentage over to my trading account and continuously compound my pay into my account. Because again, if you can have a very high success trade win rate with a small account, well, you can as well with a larger account.

[14:41] Well, with that said, hope you enjoyed this video. If you did, please give it a big thumbs up. Remember to trade responsibly. If you have any questions, comment below as well. If you're interested in learning more about trading and just what I do and how I'm navigating these markets,

[14:53] consider checking out the Patreon group links down below and I'll see you guys in the next video over night good morning adios