The Speculative Strategy: ZigZag & RSI Reversal

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The Speculative Strategy: ZigZag & RSI Reversal

The “Speculative” strategy relies on identifying market extremes using the ZigZag indicator for price structure and the RSI for momentum confirmation. It is designed to catch sharp reversals on the M15 timeframe for EURUSD and GBPUSD.

Strategy Profile

Timeframe

M15

Pairs

EURUSD, GBPUSD

Indicators

ZigZag (100) + RSI

1. Indicator Configuration

  • ZigZag: Depth 100 (Custom setting for major swings).
  • RSI: Period 14 (Standard).

2. Short Entry (Sell) Rules

  1. Price Structure: The ZigZag indicator must form a new HIGH (Upper point).
  2. Confirmation: At the same time, the RSI must be in the Overbought zone (Above 70).
ZigZag RSI Sell Strategy
Figure 1: Sell Signal – ZigZag High + RSI > 70

3. Long Entry (Buy) Rules

  1. Price Structure: The ZigZag indicator must form a new LOW (Lower point).
  2. Confirmation: At the same time, the RSI must be in the Oversold zone (Below 30).
ZigZag RSI Buy Strategy
Figure 2: Buy Signal – ZigZag Low + RSI < 30

Exit Strategy

  • Stop Loss: Tight stop of 15-20 points.
  • Take Profit: Aggressive target of 60-100 points.
  • Note: If stopped out, do not re-enter in the same direction. Wait for the opposite signal.

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