Augmented RSI Signal-Line Crossovers with Midline Filters

Summary

This document outlines a trend-following system using an augmented RSI and a smoothed signal line. Its RSI variant uses the period’s high-low range and price changes, smooths the resulting measures with a selectable average, and scales the output to a 0–100 range. The strategy enters long when the indicator crosses above its signal while below the midpoint, and enters short when it crosses below while above the midpoint. Opposite signals close existing positions before opening the new side.

The description also covers configurable smoothing methods, overbought and oversold display levels, and percentage-based position sizing. It includes a BTC/USDT futures backtest setup but reports no results, so it offers no evidence that the rules are profitable. The document identifies false signals in sideways markets, smoothing lag, parameter sensitivity, and risks from fixed sizing during sharp volatility. It suggests volatility filters, longer-term trend confirmation, adaptive sizing, and stop losses as possible extensions; these are proposals, not tested findings.

Key ideas

• The augmented RSI uses recent price range and changes, then smooths and normalizes the result.
• Long entries require an upward signal-line cross below the midpoint, while short entries require a downward cross above it.
• An opposite signal closes the existing position before the strategy enters the other direction.
• The system offers selectable averaging methods and visual overbought and oversold zones.
• Sideways conditions, lag, parameter sensitivity, and fixed sizing can undermine results; no performance evidence is reported.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.