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RFX INTRADAY IMPULSIVE/CORRECTIVE WAVE STRATEGY

THE LEADWAY TOWARDS PROFITABLE TRADING

AUTHOR KING SAMUEL

RFX INTRA-DAY IMPULSIVE/CORRECTIVE

WAVE STRATEGY

ABOUT STRATEGY

The RFX Intra-day impulsive/corrective wave strategy offers you the opportunity to Learn how to trade EUR/USD, USD/CAD, GBP/USD or any other major currency pair by mastering a system that combines top level mathematics with the fundamental principles of human behavior – simplified in such a way that even a high school dropout can quickly start profiting from it. This strategy offers Good entry point and a perfect exit.

THE RFX IMPULSIVE/CORRECTIVE WAVE STRATEGY

In trading regardless of how strong a long-term market trend is, the market never moves only in the direction of the long-term trend – there are always minor movements against the long term market trend. These deviations usually don’t last very long and after them the market moves again in the direction of the long-term trend.

The market moves in two waves;

1. Impulsive Wave: the major market movements in the direction of the long-term market trend.

2. Corrective wave: the minor market movements against the long-term market trend

STRATEGY STRUCTURE

1. Fibonacci retracement: Level 0.0, 25.0, 38.2,61.8, 75.0 and 100

2. Relative strength index : RSI 14 level 50

3. Exponential moving Average: period 28

The figure below shows the Chart on application of this three strategy tools.

CURRENCY PAIRS

The RFX impulsive/corrective wave strategy has proven to be highly profitable on the major currency pairs: EURUSD, GBPUSD, AUDUSD, USDJPY, EURGBP and USDCAD after a series of back testing from the last 5 to 10 years. (Thanks to RFX back testing tool)

SHORT TERM ENTRY STRATEGY

STEP 1: Open the 5mins chart on the right screen and also open the daily chart on the left screen.

Use 5mins chart only for signal finding and daily chart for confirmation.

5 minsdaily

STEP 2: On 5min chart, use the vertical line first to indicate your starting point. ( that's the current market price.)

Then next you identify active wave (i.e. the impulsive wave or corrective wave that is greater than or equal to 40pips in length) and draw a trend line connecting the starting point of the wave to its end point to indicate the wave.

Note the distance of the wave must be above 40pips.

Once you identify the waves.

Then select the wave that is closer to the actual time (starting point).

Let's say

Wave 1 length =47pips

Wave 2 length =50pips

Wave 3 length is =42pips

So you will be picking wave 1 (47pips) because it’s the one closer to the starting point so it will be your active wave.

STEP 3: Next thing you will do after getting your active wave is to draw fib retracement from the top of wave 3 to the bottom like this

Recall; we are using

100

75.0

61.8

38.3

25.0

0.0

Fib levels only

Definition of Fibonacci retracement levels

Fib level from 38.2 - 61.8 is the RETRACEMENT CHANNEL (i.e. 38.2 fib levels is the lower retracement level and 61.8 fib level is the upper retracement level).

Retracement Chanel is the channel between the upper and lower retracement levels.

25.0 fib level is the lower confirmation level.

While the

75.0 fib level is the upper confirmation level.

The 0.0 and 100 fib level have no trading relevance.

So let’s get back

After drawing your Fibonacci retracement levels, wait for price to enter the retracement zone.

If the price enters the retracement zone and breaks the 38.3 retracement level below. It's indicating a possible sell signal. But if the price goes below 25.0 fib level and the full candle closes below the 25.0 level. It indicates a sell confirmation so you place your entry immediately the new candle opens.

CONDITION

IF THE RSI ON DAILY IS BELOW 50 LEVEL, IT CONFIRMS THE SELL SIGNAL, BUT IF THE RSI IS ABOVE THE 50 LEVEL ON DAILY. THAT SIGNAL IS A FAKE OUT. SO YOU IGNORE AND LOOK FOR A BUY OPPORTUNITY INSTEAD.

STOP- LOSS ORDER

After placing your sell order, place your stop loss 50pips above your entry point.

The reason for this is because we don't want to lose more than 50pips on a single trade in case the market goes against. But that's not the main exit point.

ENTRY AFTER MATH

After getting your entry confirmation and placing your sell position another interesting yet important part of this strategy is to allow the market to continue until a new wave is formed (impulsive or corrective wave) that is above or equal 40pips.

Then you cancel previous fib level and draw another one at the new active wave.

You continue like that until price goes upwards and breaks above 75.0 fib level before you exit the market (this will be the perfect exit point). But if price didn't reach the 75 fib level and breaks above it. The market will still continue to sell till whenever it breaks it.

With this strategy you can make more than 300 pips on a single trade position.

This is for a sell signal

Cool right?

Yes! This strategy aligns with the Forex trading rule “cut down losses sand let profits run”.

Now for a Buy signal

After identifying your active wave and drawing your fib level. If the price breaks above the 68.1 fib level it's indicating a Buy opportunity but if the market breaks above 75.0 fib level and a full candle closes above 75.0 fib level it is a Buy signal, so once that candle closes you place your Buy entry position.

CONDITION

IF THE RSI ON DAILY IS ABOVE 50 LEVEL, IT CONFIRMS THE BUY SIGNAL, BUT IF THE RSI IS BELOW THE 50 LEVEL ON DAILY. THAT SIGNAL IS A FAKE OUT. SO YOU IGNORE AND LOOK FOR A SELL OPPORTUNITY INSTEAD.

STOP- LOSS ORDER

After placing your buy order, place your stop loss 50pips below your entry point.

The reason for this is because we don't want to lose more than 50pips on a single trade in case the market goes against. And also that's not the main exit point. Only exit the trade when price breaks the 25.0 fib level below.

The wide stop loss (HARD STOP) is to give the trade enough space to run effectively. Let the trade Breath!

NOTE: As long as new waves keep forming you allow the trade to run, until price comes down to break below the 25.0 fib level that's the only time you can exit the market and that will mark the end of that signal.

That’s a wrap for the short term trading.

RFX IMPULSIVE/CORRECTIVE LONG TERM STRATEGY

TIMEFRAME: 4HRS AND DAILY

STEP 1: Open the 4 hour chart on the right screen and also open the daily chart on the left screen.

Use 4 hours chart only for signal finding and daily chart for confirmation.

STEP 2: On 4HR chart, use the vertical line first to indicate your starting point. ( that's the current market price.)

Next, identify your active wave with a length above or equal to 150pips.

Once you identify all the waves with 150pips and above, your active wave will be the wave that is closer to 100pips. Example

Wave 1= 165pips

Wave 2= 156pips

Wave 3= 160pips.

Your active wave will be wave 1 with 165 pips

STEP 3: Next thing you will do after getting your active wave is to draw fib retracement from the top of wave 3 to the bottom like this

After drawing your fib retracement levels, wait for price to trigger your buy /sell confirmation levels to place your entry

CONDITION

IF THE RSI ON DAILY IS ABOVE 50 LEVEL, IT CONFIRMS THE BUY SIGNAL, BUT IF THE RSI IS BELOW THE 50 LEVEL ON DAILY. THAT SIGNAL IS A FAKE OUT. SO YOU IGNORE AND LOOK FOR A SELL OPPORTUNITY INSTEAD.

STOP- LOSS ORDER

After placing your sell order, place your stop loss 100pips from your entry point.

This is just for incase there is an unusual move in the market you won't loss more than 100pips or blowing your account but it doesn't mean that it will reach there. It’s important to give your trade enough space to breath.

ENTRY AFTER MATH

After getting your entry confirmation and placing your buy/sell position another interesting yet important part of this strategy is to allow the market to continue until a new wave is formed (impulsive or corrective wave) that is above or equal 150pips.

Then you cancel previous fib level and draw another one at the new active wave.

For a buy position, only exit the trade if price breaks and close below 23.8 fib level of the active wave.

Only exit a sell trade if the price breaks and closes above the 75 fib level.

This idea behind the exit strategy is actually just watching out for a buy signal during an active sell trade position and a sell signal during an active buy trade position. Anything that makes price to reach the exit point that means that trade has changed direction and you can safely exit without cutting short the potential amount of pips you can milk out from your trading position. So it is safe to say that the RFX impulsive/corrective wave strategy offers you a maximum possible profit on a trade.

A proven back testing and forward testing of this strategy shows that you can make up to 700pips in profit and more on a single trade.

Let’s check out some trade examples shall we;

GBPUSD: using the short term RFX entry strategy (5 min. chart for entry and daily chart fo confirmation)

Open the daily chart, the daily chart shows that the 14 RSI is above level 50. This indicates that we should be looking out for a buy signal.

Step 1: On the 5 minutes timeframe, we look for all waves (impulsive or corrective wave) that is 40pips and above, then identify the wave whose pip value is closer to 40pips (active wave)

STEP 2: After identifying our active wave, we draw Fibonacci retracement from the top of the wave to the end of the wave, and then wait for our signal indication

At 08:35 am on 15/05/2023, price breaks above 75 fib Level (upper confirmation level) with a full candlestick closing above it. This will be our entry position.

After placing our entry, we place a hard stop-loss 40 pips below entry point and allow the trade to run.

At 6:30am on 16/06/2023 the trade had moved +142 pips and that’s where we identified another active wave.

Draw the Fibonacci retracement on the new active wave and let the trade continue to run.

At 8:38am on 16/06/2023 the trade had moved +182 pips before we recognized a new active wave and also draw our Fibonacci retracement levels connecting the wave.

At 7:04 on 16/06/2023, price breaks the lower confirmation level (23.6 fib level) and this indicates a sell opportunity so we exit our buy position with 144 pips secured.

Exit Aftermath, as you can see below, after exiting the trade price goes down the drain.

Let’s see another example; Using RFX impulsive/corrective wave long term strategy

EURGBP start trade on the 16/05/2023 at 12:05AM, First open the daily chart to check the market trend using the 14 period RSI.

14- Period RSI is below 50 level, this indicates a downtrend market so we will be looking out for a sell opportunities only.

Next open the 4 hour chart and using a vertical line to indicate the trade starting point, then lookout for waves equal to or above 150pips close to the starting point.

Wave 1= 230 pips

Wave 2 = 162 pips (Active wave)

Wave 2 is our active wave because it’s closer to 150 pips, so we draw our Fibonacci retracement levels on the active wave and wave for signal indication.

We can see above that the price went into the retracement channel (i.e. 38.2 -61.8 fib level) so we wait for price to fall below and break the lower confirmation level (23.6 fib level)

On 24/05/2023 at 12:00am price had broken the upper confirmation zone with a full bearish candle closing above it (75.0 fib level). This indicates a buy confirmation on 4hr timeframe however; recall that on daily our 14- Period RSI is below 50. So this does not align with our market trend so we ignore for it’s a fake signal.

On 2/06/2023 at 12:02am price had fall down to break the lower confirmation level (23.6 fib level) with a full candle closing below it. This indicates a sell signal confirmation and we place our entry.

Then we place our stop-loss 100 pips above entry point to give the trade enough room to breathe. 0n 19/06/2023 at 4:00am the trade had gone +250 pips before we identified a new active wave.

This trade went +308 pips at 4:00am on 27/06/2023.

Next we allow the trade to run. This is an ongoing trade as of the time writing this strategy guide.

Do not exit the trade unless price breaks above the 75.0 fib level.

More reason to stay on this trade on daily chart 14-Period RSI is still below 50 level indicating that the trend is still downwards.

Another example: USDJPY, trade started on the 13/06/2023 at 3:35 daily chart shows that the market is an uptrend market (14-period RSI above 50), so we are going to be looking out for buy opportunities.

Next we move to 4 hour chart to indicate the trade starting point and identify the active wave. The active wave is 150pips.

Draw the Fibonacci retracement from the starting point of the wave to its end point and wait for a buy confirmation.

On 14/06/2023 at 12:00am price breaks above the 75 fib level with a full candle closing above it, so we placed our buy entry and placed stop-loss 100 pips below entry.

After entry price moves against the position down to 38.2 fib level, however it didn’t break below 25.0 fib level and reversed 148pips above entry point before a new active wave was formed.

On the new active wave we draw the Fibonacci retracement levels and allow the trade to run with the aim of only exiting the market when price breaks the 25.0 fib level.

On 30/06/2023 at 12:00am price moved +505 pips from entry point with no exit signal in view as at the point of writing this strategy guide.

RFX Intraday Impulsive/Corrective Wave Strategy Conclusion

The parameters of RFX strategy are:

• The minimum height of a movement to be considered as an active wave (used is 40 pips for intraday, 150 pips for long-term trading)

• The distance between the entry price and the hard stop order (used is 40 pips for intraday, 100 pips for long-term trading)

• The minimum RSI value for the market considered bullish (used is 50 both for intraday and long-term trading)

• The maximum RSI value for the market considered bearish (used is 50 both for intraday and long-term trading)

Consistency of RFX Intraday Impulsive/Corrective wave Strategy

It is important for a trading strategy to be consistent and the strategy presented in this guide is highly consistent. In the long run it is the consistency of a strategy more than its efficiency that will make you successful in the trading business

Efficiency of RFX Intraday Impulsive/Corrective wave Strategy

Efficiency of a trading strategy is basically a measure of profit that is realized using the strategy during specified period of time. When comparing different trading strategies, those strategies that show more profit during specified period of time are said to be more efficient.

Simplicity

As we all know Forex trading strategies are becoming more and more complex and sophisticated. What does it mean for our average independent trader? It means that our simplicity factor when developing a trading strategy gains in importance. Therefore at Royal Forex Academy (RFX), we have set ourselves with a goal of finding a trading strategy that is comparable in its profit potential to the most complex professional trading system and at the same time is feasible and understandable to our average trader.

HAPPY TRADING!

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