RSI Trading Strategy for Prop Firm Challenges

The Relative Strength Index is one of the simplest indicators that survives contact with real prop firm rules. Use RSI as a filter (overbought/oversold + divergence), pair it with a hard stop, and size trades with a fixed % risk to stay inside daily loss, trailing drawdown, and consistency limits.

The Setup, Step by Step

1. Set your bias on the 4H chart (RSI above/below 50).
2. Wait for RSI ≥70 or ≤30 on your entry timeframe.
3. Confirm with divergence against price.
4. Risk a fixed 0.5–1% per trade.
5. Place a hard stop beyond the swing.
6. Target the 50-period MA (1:2 minimum).
7. Cap the day at 2 losses.

Prop-Firm-Specific Pitfalls

Trailing drawdown accounts reward mean-reversion. News rules require flat 2 minutes before red-folder events. Consistency rules (Apex 50%, Topstep 30%) demand fixed sizing.

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