Trend-following RSI Strategy

According to classical technical analysis , an RSI above 70 should signal overbought conditions and, thus, a sell-signal. Cryptocurrencies represent a whole new asset class, and they reshape the classical concepts of technical analysis . FOMO-buying can be very powerful, and coins can remain in overbought conditions enough to provide excellent opportunities for scalping trades on the upside.

Building a trend-following trading strategy based on the RSI , which is generally considered a contrarian indicator, may sound counter-intuitive. Over 200 backtests prove that this is a very interesting long-term setup.

The setup is optimized on a 4-hours time frame and trading cryptocurrencies versus USD or stable coins.

The strategy tries to catch coins on sustained uptrends to take advantage of further upside.

  • The strategy's buy-signal triggers when a coin has an RSI above 70 on a 4-hours time frame.
  • The strategy sells the coin if a profit of 6% is achieved. Alternatively, it closes the position if the RSI drops below 55, indicating a possible weakening of the trend.

The strategy assumes each order to trade 30% of the available capital. A trading fee of 0.1% is taken into account. The fee is aligned to the base fee applied on Binance, which is the largest cryptocurrency exchange.

Skrypt open-source

Zgodnie z prawdziwym duchem TradingView, autor tego skryptu opublikował go jako open-source, aby traderzy mogli go zrozumieć i zweryfikować. Brawo dla autora! Możesz używać go za darmo, ale ponowne wykorzystanie tego kodu w publikacji jest regulowane przez Dobre Praktyki. Możesz go oznaczyć jako ulubione, aby użyć go na wykresie.

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