📊 Successful trading isn't about predicting every move. It's about finding high-probability setups and managing risk.
Here are 4 key elements of Romain Bailleul's trading approach.
🔻 1. RSI DIVERGENCE — IDENTIFYING WEAKENING MOMENTUM
Romain looks for bearish RSI divergence, where price makes a higher high while RSI forms a lower high.
This can signal weakening bullish momentum and a potential reversal. However, divergence alone isn't a sufficient reason to enter a trade.
📉 2. TRENDLINE BREAK — LOOKING FOR CONFIRMATION
Rather than relying solely on divergence, he also considers a break of the trendline before entering a short position.
The logic is simple: momentum weakness identifies a potential opportunity, while a structural break can provide additional confirmation.
📐 3. FIBONACCI — DEFINING PRICE TARGETS
Romain uses Fibonacci retracement levels, including 50% and 61.8%, as part of his trading analysis.
These levels help identify potential retracement zones and plan exits. They are reference points, not guaranteed reversal levels.
⚡ 4. EXECUTION & RISK MANAGEMENT
A trading setup is only part of the process. Position sizing, entry timing and exit decisions determine how that setup translates into results.
A disciplined trader should define the invalidation level before entering, avoid chasing price and adjust position risk to the quality of the setup.
🧠 THE KEY TAKEAWAY
The real value of this approach lies in combining multiple signals:
• RSI divergence to identify potential momentum shifts.
• Trendline breaks to assess price structure.
• Fibonacci to map potential retracement targets.
• Risk management to control losses when the analysis is wrong.
No indicator guarantees a winning trade. The objective is to build a repeatable process with positive expectancy over a sufficiently large sample of trades.
💬 Which approach do you prefer for identifying reversals: RSI divergence, trendline breaks, or Fibonacci levels?
