Hourly FX RSI Strategy with Threshold-Based Entries and Exits

Summary

The document describes a simple hourly foreign-exchange system using a 14-period RSI. It opens one long position when RSI falls below 30 and closes that position once RSI reaches 60 or higher. It opens one short position when RSI rises above 70 and exits the short when RSI falls to 40 or below; position accumulation is disabled.

Reported backtests cover AUDUSD, AUDSGD, and EURUSD from August 2012 through November 2016, using initial capital of 10,000 and a stated spread of 2. The post reports profits, maximum drawdowns, and winning-trade percentages for each pair, but gives no trade counts, testing methodology, or independent validation. It notes that short trades performed better in the sampled period, possibly because of prevailing declines, and that the approach can experience extended stretches of small losses or limited gains. AUDSGD is described as correlated with AUDUSD and more sensitive to spread costs.

Key ideas

• Long entries occur below RSI 30 and exit at RSI 60 or above.
• Short entries occur above RSI 70 and exit at RSI 40 or below.
• The reported hourly tests cover three currency pairs over August 2012 to November 2016.
• The author reports pair-level returns, drawdowns, and win rates, but provides limited validation detail.
• The document warns of prolonged weak periods, possible directional bias, and spread sensitivity.

Tags

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