Trading with

THE CARDWELL RSI EDGE

“All men are created equal – some just work harder in the
preseason.”
- Reebok Commercial
 Divergence Signal Counts

Trend Analysis Range Analysis

Trend Change Moving Averages

Pattern Recognition

Combining Range Analysis

With
Moving Averages

Price Forecasting
with
Positive & Negative Reversals
Range Analysis with RSI

100 Parameters of RSI

90 Extreme Overbought 1. Value of RSI (0-100)
2. Normal Range: 70/30
80 3. Bull Range: 80/40
Initial Overbought 4. Bear Range: 60/20
70 5. Overbought/Oversold:
80/20
60 POSITIVE 6. Mid Point or Basis Level: 50

50
40
NEGATIVE
30
20 Initial Oversold

10
Extreme Oversold
0
Series1
Range Rules

80/40  60/20 60/20  80/40

80 80
40 40
0 0
A 80/40
S 80/40
S D
e e
B 60/20
r r
60/20 C
i i
e e
s s
1 1

Note - Bull Range: 80/40

Bear Range: 60/20
Seeing the Trend

Positive Trend Negative Trend

55 55
1
3
35 35
2
S 2 S
e e
r r
i i
1 3
e e
s s
1 1
1. Short-term trend turning up 1. Short-term trend turning down
2. Intermediate trend turning up 2. Intermediate trend turning down
3. Intermediate/Long-term up 3. Intermediate/Long-term down
(Begins upside acceleration) (Begins downside acceleration)
RSI Divergence & Signal Count

 Momentum Highs / Momentum Lows

 “X” Points
 Bullish / Bearish (Positive Reversal / Negative Reversal)
 Degree of: Short, Intermediate, Long-term
 The Signal Count (2-5)
Basic Divergences
Bullish Divergence – 2 Period Signal

106
104
103 1

99
100

Se- Se- Se- 2

X 1
ries ries ries X
2
1 1 1

Bearish Divergence – 2 Period Signal

100 X

103 2

98

97 1
96
Se- Se- Se-
X
ries 1 2 ries ries
1 1 1
RSI Chart
Bearish Divergence Negative Reversal
121
121
(X) 123 123 (2)
120 (2)
(X)

120
119 119
(1)
120
118 117 (1)
118

Se
ri Se
es rie
1 s1
Negative Reversal Target
X = Momentum high X – 2 = 2 (123 – 121 = 2)
118 – 2 = 116 or Lower

Bullish Divergence Positive Reversal

123
121 120 119
119
120 (1)
(1)

(2) 117
118
115
(X)
(X)
117 115 (2)
118

Se Se
rie rie
s1 s1
X = Momentum low Positive Reversal Target
2 – X = 3 (118 – 115 = 3)
120 + 3 = 123 or Higher
The ABCs of RSI
L
170 N
J 174 P
163 175
T
X
168
H M R 163
O (NR) V
159 165 170 (NR)
169 166
D F Z
155 **
145 158
B
140 Q
163 U
I K 163
157 159 S W
E (PR) 157 155 Y
S 142 G 154
148
e C (PR)
125
ri
e A
130
s
1