Distance Close Bars Trend Strategy with RSI Filter and Martingale Sizing

Summary

This trend-following approach uses the Distance Close Bars (DCB) concept: it tracks the latest up-candle and down-candle closing prices, measures the gap between them, and compares that distance with its 30-period simple moving average. A signal is generated when the distance exceeds twice that average, with a fast RSI filter intended to screen entries. The description presents it for medium- to longer-term trading, although it does not establish that the method performs well over those horizons.

The strategy enters when there is no position, sizes trades as a percentage of equity, and can double sizing after a losing exit under its martingale option. Opposing signals close and reverse positions, while a candle-direction condition can trigger exits. The published configuration is a short BTC/USDT futures test, but no returns or other results are supplied. The document warns that DCB can produce false signals and martingale sizing can magnify losses; it gives no quantitative risk limits or evidence that optimization would resolve these issues.

Key ideas

• DCB compares the latest up-candle and down-candle closes and their gap against a moving average of that gap.
• A fast RSI condition is used to filter directional signals.
• The strategy can increase position size after a losing exit through martingale sizing.
• Signals can close or reverse positions, and candle direction can trigger an exit.
• The document reports a short backtest configuration but no performance results, and warns that martingale sizing amplifies risk.

Tags

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