How does EFC work?
Quick answerEFC watches RSI(14). Deep in oversold (both under 30), a close lower than one of the last 10 but with a higher RSI is the setup: a bullish divergence. It places a buy stop at the high of the candle where RSI crossed 30; price coming back up through it is the trade.
The details
- Orange candles: RSI under 30 (or over 70).
- Blue candle: the divergence, the setup.
- The buy stop: at the high of the candle RSI crossed 30. A stock that keeps falling never fills; if RSI climbs over 50 first, the order is cancelled.
- Filled: the candles glow neon cyan while the trade is open.
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