Clarifying TRSI signal

[Justin]

See attached 4-hour chart of GBP/JPY. I have a quick question about TRSI...

We have a crossover here but its below 40, price is going up. Is it a better strategy to wait for a gray/red crossover and it to go above the 40 line as confirmation before jumping in? I've jumped in early in the past (albeit using the TRSI on a lower timeframe) and as soon as I did it went against me.

Just trying to pinpoint better entries and continue to improve my skill.

[FibMaster]

Great question. I see you are a DailyForexCharts member (http://tinyurl.com/c2ktb8) so you did see the GBP/JPY video update last night??

Here is the short answer... 6o Minute chart attached.

Bearish scenario (my preference at this moment).
This pair broke below the support of about 138.75 and also the supporting up-trend-line. On a 60-minute chart there is SK resistance at about 138.75 (yes same place). Another cross down of the 4H TRSI with GBPJPY resisting at that level would be an attractive shorting opportunity. (Could find some lower time-frame entries, say 60 min or 30 min, particularly if there are confirming price patterns ie Head & Shoulders, or declining swing highs and lows). Below 138.75, shorting zone, short rallies.

Bullish scenario.
Rally above that resistance/support can create long opportunities. Need a pattern of ascending highs and lows. 4-hour TRSI already up, so 60M and under, TRSI crossing up is potential long trigger. Above 138.75, long zone, buy dips..

Either way, if there is no confirmation with swing highs and lows going the right way, not a good trade, avoid stalling whipsaw.

Thank goodness I didn't type the long answer, fingers wearing out, ROFL.

[FibMaster]

Just to clarify, the bullish option is as good as the bearish, trade whichever the chart gives.

The supporting trend-line could be drawn a little differently, so it is more of a "zone" than a specific value.

The chart is in contest right now, between higher and lower time-frame opposing trends.

[Justin]

Thanks Neal,

I am indeed a member of your DailyForexCharts and did watch the update.

I'm a bit aggressive when it comes to jumping in sometimes and when I see both price moving and a crossover on the TRSI on a 4 hour chart, my trigger finger gets a little itchy (some old habits die hard).

Regardless of the current move on the chart, my question was more about crossovers occurring below the 40 line. I'm aware of the strategy you outline in your TRSI seminar to buy or sell the first crossover either above the 60 or below the 40. I was just wanting some feedback on using the 40 line as another means of confirming a reversal after a crossover.

[FibMaster]

I thought about that, after posting my reply, that I may not have actually answered your question..

You are talking about the TRSI POP, and TRSI DROP. Below 40 you want to short the next cross down. Not blindly of course, but that's the setup you want to look for.