Long-Only RSI Bullish Divergence Strategy with Oversold Entries

Summary

This document presents a long-only strategy that looks for bullish RSI divergences while RSI is below 30. It describes both regular divergence, where price makes a lower low while RSI makes a higher low, and hidden divergence, where price makes a higher low while RSI makes a lower low. The search spans a configurable lookback range. For exits, the description calls for RSI to rise above 40 after a minimum holding period, with a percentage stop intended to limit losses. Position sizing is described as a percentage of account equity.

Published settings specify a two-day ETH/USDT futures backtest window, but no performance results are included. The supplied code contains an RSI exit and minimum hold counter, but it does not implement the described percentage stop loss; nor does it show a take-profit rule matching the explanatory text. Divergence detection and parameter choices may be sensitive to market conditions, and the document warns about repeated signals in sideways markets, gaps, and trading costs. Its claims of improved reliability are not supported by reported statistics.

Key ideas

• Long entries require RSI below 30 and detection of either regular or hidden bullish divergence.
• Divergence detection searches a configurable range of historical bars.
• The described exit waits for RSI to exceed 40 after a minimum holding period.
• The source code does not include the percentage stop loss claimed in the explanation.
• The document gives backtest settings but reports no performance statistics.

Tags

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