A RSI’s case study 

The normal default setting for RSI is 14 on technical charts, however in the current case study we examine what happens to the major FX instruments after 3-days since RSI (5) hits or goes  to 27 or below. 

As we can see above, the majority of major FX instruments react positively after 3-days since RSI (5) crosses above the oversold level (27). 

By reviewing USDJPY, we see that the study contains 1961 bars. Since 2014.12.17, RSI crossed above the 27 level 102 times. According to the statistics, we see that the last case resulted in a positive 0.19% change. Further, by looking at the mean % change and median % change, we see that both were bullish (0.16% and 0.21% respectively).  

By clicking on the USDJPY symbol, we can get the graph with the study’s results as below (only available in MT5). 

In the MT4 version we have to select only one level, and the option to see what happens if the price crosses above or below this level. 

In the example that follows, we can see what happens when the price crosses below the 30 level of the RSI. 

Bollinger Bands 

Bollinger Bands is a technical indicator developed by John Bollinger, which is used to measure a market’s volatility and identify “overbought” or “oversold” conditions. 

Bollinger Bands are typically plotted as three lines: An upper band, a middle line, a lower band. 

The middle line of the indicator is a simple moving average (SMA). 

Most charting programs default to a 20-period, which is fine for most traders, but traders can experiment with different moving average lengths after they get a little experience applying Bollinger Bands. 

The upper and lower bands, by default, represent two standard deviations above and below the middle line (moving average). 

The Screener results for BBands displays the following: 

A BBands’s case study 

We examine what happens to the major FX instruments after 8-days since prices hit or closed below the lower band (BBands: 23, 2). 

According to the following table, we see that the majority of the instruments experienced a bullish movement, after 8-days since prices hit or closed below the lower band (BBands: 23, 2). 

By picking up USDJPY, we see that the study contains 1961 bars. Since 2015.01.15, a more than 1% gain within a week has occured 103 times. According to the statistics, we see that the last case resulted in a positive 1.69% change. Further, by looking at the mean % change and median % change, we see that both were bearish (0.39% and 0.29% respectively).  

By clicking on the USDJPY symbol, we can get the graph with the study’s results as below (only available in MT5).  

It displays the price’s % change at a checkpoint after a certain % change occurs in a bar. 

A %Change’s case study 

We examine what happens to the major FX instruments 3 weeks after a more than 1% gain occurred within a week.

Once again here, the historical analytics are very encouraging as we can see at the following table. 

Overall, analyzing the above historical data since 2010.01.01, we see that a more than 1% within a week gain resulted in a bearish % change in most of prices’ instruments on average (Mean) after 3 weeks.  

Specifically at the EURUSD pair, we see that the study contains 2682 bars. Since 2010.01.01, a more than 1% gain within a week has occured 115 times. According to the statistics, we see that the last streak resulted in a positive -1.58% change. By looking at the mean % change and median % change, we see that both were bearish (-0.19% and -0.13% respectively).  

By clicking on the EURUSD symbol, we can get the graph with the study’s results as below (only available in MT5).  

Setup Filter takes the available data after the default starting date 01.01.2010 for the preferred time frame. Traders set the Streak Length, which is the  continuous successive movement up or down over a defined period. The Checkpoint refers to the number of the bars that traders want to monitor after the criteria are met. 

A Streak’s case study 

We examine what happens to the major FX pairs 12-hours after 3 successive 4-hours down moves.  

According to the following table, the historical statistics are very encouraging.  

Overall, analyzing the available historical data after 2010.01.01, we see that a 12-hours falling streak has resulted in positive % change in all prices’ instruments on average (Mean) 12-hours after the 12-hours streak. 

Analyzing the EURUSD symbol, we see that the study contains 43670 bars and 618 streaks since 2010.01.05. According to the statistics, we see that the last streak resulted in a positive 0.21% change. Looking at the mean % change and median % change, we see that both were positive (0.14% and 0.10% respectively).  

By clicking on the EURUSD symbol, we can get the graph with the study’s results as below (only available in MT5). 

A Crosses’ study case  

We examine what happens in the major FX instruments an hour after (Checkpoint: 4, meaning 4 periods of H1 each) 5-period SMA crossover above the 33-period SMA. Always be sure to check the timeframe to be sure what the period (i.e. H1 time frame) represents. 

Traders set the Fast MA period  (i.e. 5) and the Slow MA period (i.e. 33), then select Cross Up or Down (i.e. Up) and the Checkpoint (i.e. 4). At the Checkpoint box, traders count the bars that they want to monitor after the criteria are met, then click on the Calculate button. 

The Screener for Crosses displays the following: 

1. Symbols 

2. Total Bars, which is the total number of bars since the beginning of the range (e.g. available data after the 01.01.2010) 

3. Cross Count, which is the count of the Crosses that Investors set at in the Setup Filter. 

4. First Cross 

5. Last Cross 

6. Last/Mean/Median display the change % for the study that traders set. 

Overall, analyzing the above historical data after the default starting date 2010.01.01, we see that the 5-period SMA crossover to 33-period SMA in the M15 time frame has resulted in a positive % change in all prices’ instruments on average (Mean). 

More specifically, picking up the EURUSD pair, we see that the study contains 101200 total H1 bars and 1663 crossover of 5-period SMA to 33-period SMA. According to the statistics, we see that the last crossover resulted in a 0.49% change. Additionally, looking at the mean % change and median % change, we also see that both were positive (0.07% and 0.03% respectively).  

One might interpret these results as saying that while the study produces positive results for going long (bullish) probably it’s a good and profitable strategy to follow.. 

By clicking on the EURUSD symbol, we get the graph with the study’s results as it seems below (only available in MT5) 

In the MT4 version, we have a different look and feel but the logic remains pretty much the same. In this version we also have a notification if the study is active right now. In this example we see that the GBPUSD currency pair had a cross up during the last 10 bars (checkpoint) and currently is on a -3.39% from this cross.  

InvestorHubFx Screener helps traders to pick up studies with the tools, such as Crosses, Streak, % Change, BBands and RSI and check the historical results. 

Screener’s definitions: Before we continue with the case studies, let’s explain the terms “Starting date”, “last”, “mean” and “median”.

Starting Date 

InvestorHubFx Screener displays the historical results when the above criteria is met. Default starting date is 2010.01.01, although the tool displays data since they are available (maybe after the starting date). By clicking F7, traders can change the default starting date.  

Last, Mean and Median % Change 

The term “last” refers to the last bar % change. The term “mean” is the “average”, where you add up all the numbers and then divide by the number of numbers. The “median” is found by ordering a set from lowest to highest and finding the exact middle.