MACD Crossovers Filtered by RSI Extremes for Reversal Entries

Summary

This long-only reversal approach combines MACD crossovers with RSI readings. It opens a long position when the MACD line crosses above its signal line and RSI has recently been at or below the oversold threshold. It closes that position on a bearish MACD crossover when RSI has recently reached the overbought threshold. The published settings specify MACD inputs of 12, 26, and 9, and RSI thresholds of 35 and 80 with a length of 14. The code checks whether the relevant RSI extreme occurred within the current or previous five bars.

The document explains the intended benefit of combining trend and momentum signals, but reports no backtest results despite including a BTC-USDT futures test window. It warns that choppy markets can create false MACD signals and that parameter choice and risk controls matter. The implementation has no explicit stop loss, position sizing, or short entry, and the accompanying prose is inconsistent about whether the buy condition follows an oversold or overbought reading. These details limit what can be inferred about its effectiveness.

Key ideas

• A bullish MACD crossover is paired with a recent RSI oversold reading to open a long position.
• A bearish MACD crossover combined with a recent RSI overbought reading closes the long position.
• The example uses MACD settings of 12, 26, and 9 and an RSI length of 14.
• The strategy description and code differ on the RSI condition for entry, so the intended rule is ambiguous.
• No performance results or explicit stop-loss and position-sizing rules are provided.

Tags

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