đ 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.
đ»Â 1. RSI DIVERGENCE â 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.
đ 2. TRENDLINE BREAK â 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.
đ 3. FIBONACCI â 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.
âĄÂ 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.
𧠠THE KEY TAKEAWAY
The real value of this approach lies in combining multiple signals:
âą RSI divergence to identify potential momentum shifts.
âą Trendline breaks to assess price structure.
âą Fibonacci to map potential retracement targets.
âą 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.
đŹÂ Which approach do you prefer for identifying reversals: RSI divergence, trendline breaks, or Fibonacci levels?
