Coinrule

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.




Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.

Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.

Want to use this script on a chart?