EUR/USD Intraday Divergence Strategy with Donchian Filtering and Reversals

Summary

This intraday EUR/USD system uses five-minute bars during a stated daytime session. It enters long or short on RSI divergence signals near swing lows or highs, subject to a modified, delayed Donchian Channel filter intended to avoid entries against strong trends. New entries are limited to a specified time, and a move against the open position beyond a percentage threshold triggers a reversal into the opposite direction. The author also includes a wider protective loss stop and profit target, describing them as safeguards rather than the system’s usual exit mechanism.

The author reports having backtested the setup and says other configurations produced similar results, but gives no performance statistics or detailed test methodology. Testing was limited by the platform’s candle-history cap. Position sizing is left to the user, and the author explicitly says sizing was not satisfactorily addressed. These limits make the system an incomplete template: its reversal behavior can increase exposure, while sizing, execution assumptions, robustness, and risk-adjusted results remain unestablished.

Key ideas

• The system trades EUR/USD intraday on five-minute bars within a defined session.
• RSI divergence signals identify potential swing reversals, while a delayed Donchian filter screens trend conditions.
• A percentage move against the position triggers a reversal into the opposite direction.
• A separate loss stop and profit target are included as safeguards.
• The author leaves position sizing unresolved and provides no detailed performance evidence beyond mentioning backtests.

Tags

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