The RMO Trade Model consists of 4 modules which are explained below:
The RMO Ribbon
This module detects the primary trend and was developed to smoothen out multiple market swings.
If the RMO Ribbon is positive (green) one concludes that the long term / primary trend is UP. In this case, we ideally look for blue Buy arrows with Blue bars to put on long trades.
This module detects the primary trend and was developed to smoothen out multiple market swings.
If the RMO Ribbon is positive (green) one concludes that the long term / primary trend is UP. In this case, we ideally look for blue Buy arrows with Blue bars to put on long trades.
If the RMO Ribbon is negative (red) the indications are that the long term / primary trend is DOWN. In this situation, we look for Red Sell arrows with Red bars to put on short trades.
Sentiment Detector
This RMO expert colors the OHLC chart bars red (bearish) or blue (bullish) indicating the prevailing sentiment.
This RMO expert colors the OHLC chart bars red (bearish) or blue (bullish) indicating the prevailing sentiment.
When the bars change in color, it signals the first indication of trend change or breakout; this can be easily viewed with red and blue bars with the RMO Expert that has been provided. A more confirmed interpretation is to expect strength when the high of a blue breakout bar is crossed and weakness when the low of a first red down breakout bar is broken.
Impulse Detector
This RMO expert prints the buy or sell signals, sell signal (bearish) or buy signal (bullish) indicating the prevailing sentiment.
This RMO expert prints the buy or sell signals, sell signal (bearish) or buy signal (bullish) indicating the prevailing sentiment.
Exit Swing Indicator (ESI)
This module is used only when registering a profitable trade; it can help us detect a trailing stop loss and also works well as an partial profit taking mechanism.
This module is used only when registering a profitable trade; it can help us detect a trailing stop loss and also works well as an partial profit taking mechanism.
Only after you have entered a trade and are profitably into an established trend, should you use the ESI. Consider taking partial profits in longs below the low when the EXIT Swing Indicator leaves the over-bought region (ESI goes below 75). Likewise consider taking partial profits in a short trade above the high of the bar when the ESI exits the oversold region (ESI goes above 25 level).
Below are two possible setups for using the RMO as a trading indicator.
“Trade with the Trend” Buy Setup
Swing Trade: BUY Arrow (Blue)
Sentiment: BLUE Bars
RMO: Positive (Green)
This setup is a strong buy trade as the primary trend is up, an up swing is setting in and also the sentiment is bullish.
As we are trading in the direction of Primary Trend (RMO), this setup is even more accurate & reliable.
Swing Trade: BUY Arrow (Blue)
Sentiment: BLUE Bars
RMO: Positive (Green)
This setup is a strong buy trade as the primary trend is up, an up swing is setting in and also the sentiment is bullish.
As we are trading in the direction of Primary Trend (RMO), this setup is even more accurate & reliable.
“Aggressive BUY Breakout” Buy Setup
Swing Trade: BUY Arrow (Blue)
Sentiment: BLUE Bars
RMO: Negative (Red)
With this setup you are essentially expecting that the market sentiment will turn positive when you see the bars change to a blue color and the swing trade buy arrow shows up. However, as the primary trend (RMO) is still negative, you might want to consider trading in smaller amounts, a covered strategy, or just buy “call” options.
Swing Trade: BUY Arrow (Blue)
Sentiment: BLUE Bars
RMO: Negative (Red)
With this setup you are essentially expecting that the market sentiment will turn positive when you see the bars change to a blue color and the swing trade buy arrow shows up. However, as the primary trend (RMO) is still negative, you might want to consider trading in smaller amounts, a covered strategy, or just buy “call” options.
“Trade with the Trend” Sell Setup
Swing Trade: SELL Arrow (Red)
Sentiment: Red Bars
RMO: Negative (Red)
This setup is a strong sell trade as the primary trend is down, an down swing is setting in and also the sentiment is bearish.
As we are trading in the direction of Primary Trend (RMO), this setup is even more accurate & reliable.
Swing Trade: SELL Arrow (Red)
Sentiment: Red Bars
RMO: Negative (Red)
This setup is a strong sell trade as the primary trend is down, an down swing is setting in and also the sentiment is bearish.
As we are trading in the direction of Primary Trend (RMO), this setup is even more accurate & reliable.
“Aggressive SELL Breakdown” Sell Setup
Swing Trade: SELL Arrow (Red)
Sentiment: RED Bars
RMO: Positive (Green)
With this setup you are essentially expecting that the market sentiment will turn negative when you see the bars change to a red color and the swing trade sell arrow shows up. However, as the primary trend (RMO) is still positive, you might want to consider trading in smaller amounts, a covered strategy, or just buy “put” options.
Swing Trade: SELL Arrow (Red)
Sentiment: RED Bars
RMO: Positive (Green)
With this setup you are essentially expecting that the market sentiment will turn negative when you see the bars change to a red color and the swing trade sell arrow shows up. However, as the primary trend (RMO) is still positive, you might want to consider trading in smaller amounts, a covered strategy, or just buy “put” options.
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