RSI & MA Trading Strategy with Trailing Stop Loss and Take Profit
Hi there, and welcome to Coinrule’s ninth strategy of the week video. This week our strategy will make use of the RSI and some of the additional moving average periods that we have just integrated. This strategy is also available as a predesigned template on Coinrule. This means that will be extremely easy to set up and start trading with the strategy. Another important thing to note is that with this template, we also have an associated script on TradingView. Hence, you’ll be able to back-test the strategy on any kind of timeframe you choose in order to optimize it. The relative strength index is a momentum indicator used in technical analysis. It measures the speed and magnitude of a coin’s recent price changes to evaluate overvalued or undervalued conditions and the price of that coin. The RSI is displayed as an oscillator a line graph essentially on a scale of zero to 100. When RSI reaches oversold levels, it can provide a signal to go long. When the RSI reaches overbought levels, it can mark a good exit point or alternatively, an entry for a short position. Traditionally, an RSI reading of 70 or above indicates an overbought situation or a reading of 30 or below indicates an oversold condition. A Moving Average calculates the average of a selected range of prices. Usually closing prices are essentially used to help smooth out price data by creating a constantly updated average price. Moving Averages can provide important signals for opening and closing trades.
To enter trades, the strategy has two entry conditions. The first one relies on RSI and requires the RSI is greater than 50 and increases by five, just like this example here. The second entry condition relies on MA9 being above me 50, just like this. The exit conditions utilize trailing take profits and stop losses. Essentially the take profit and stop loss will adapt to the price trend strength as illustrated in this diagram. The take profit condition is a 1% price increase trailing and the stop loss condition is a 2% price decrease trailing.
Now we will run the strategy on Coinrule and back-test it on TradingView. Go on the create a rule page. The first thing that you have to do is select exchange. Type in the name of the strategy, which is RSI and MA strategy with trailing stop loss and take profit click on it, you’ll see you get an extended description over here. Click Select. And you’ll see that the template is automatically added to the rule. So, the first thing that you’re going to have to do is decide if you want it to run across all coins in the market or on one specific coin, you’re also going to have to decide the timeframe that you want the strategy to run on. So, to do that, come to our TradingView page and find the strategy. Scroll down, and click Add to favorite indicators. Then come to the chart that you wish it to run on. So, I want to test this on AVA USDT and the 30-minute time frame, then come to indicators. It will now be in your favorites and type in, here it is, click it. And you’ll see you’re given a range of back-testing data. So, you’ll see that this actually performed very well over 280 trades, it made 98% net profit on AVA USDT in the 30-minute timeframe. This back-testing data is also only from the bear market. So, it simulates current market conditions. So, to see if it works better on other timeframes, maybe there are better ones than the 30 minutes, you can come up here and change it. So, in 15 minutes, you see it make less profit or significantly less profit change to five minutes. And you’ll see although made more profit than the 15-minute timeframe, it wasn’t nearly as good as the 30-minute. So, I’m very happy with his performance in the 30-minute time frame. And you can also test across different coins but I’m more than happy with this performance here. So then come back to Coinrule and type in the name of the coin. So here it is AVA. For instance, I’ll put $100. Then specify which wallet you wanted to buy in. And I want to sell it also to my USDT wallet. And again, sell to my USDT Wallet. So, see here, this is our take profit condition and our stop loss condition here. And these are our entry conditions we’ve already been over. So, scroll down, and you’ll see, you have to say how many times you wanted to execute. So, I want this strategy to execute 100 times in total, and you’ll see that the name is already added because we do this from a template. So, click launch. And you’ll see you’re given a preview of the rule. And then click launch.
And there we go. The strategy is live.
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I am not an analyst or investment advisor. Everything that I provide here site is purely for guidance, informational and educational purposes. All information contained in my post should be independently verified and confirmed. I can’t be found accountable for any loss or damage whatsoever caused in reliance upon such information. Please be aware of the risks involved with trading cryptocurrencies.
