Pyramiding Moving Average Crossovers with RSI Profit-Taking

Summary

This trend-following strategy generates entries when the midpoint of a candle’s open and close crosses either a 4-period EMA or an 8-period SMA. Each average can trigger an entry, allowing up to two entries in the same direction. On a signal in the opposite direction, the strategy closes existing opposing exposure before entering the new side. It closes all long positions when the 14-period RSI rises above 70 and all shorts when it falls below 30.

The document includes an ETH/USDT futures backtest configuration for a stated one-month period, but gives no performance results. It warns that repeated crossovers in ranging markets can increase false signals and costs, RSI thresholds can close positions early in persistent trends, and the strategy has no explicit stop-loss. Pyramiding may also increase exposure during volatile moves. Suggested safeguards include trend filters, stop-loss rules, exposure limits, and more flexible sizing; their effectiveness is not demonstrated.

Key ideas

• The candle midpoint crossing a 4-period EMA or an 8-period SMA can trigger entries in either direction.
• The strategy allows up to two entries and closes opposing exposure when a reverse signal appears.
• RSI above 70 closes long positions, while RSI below 30 closes short positions.
• The published ETH/USDT futures test setup includes no reported performance results.
• Ranging-market whipsaws, early RSI exits, absent explicit stop-losses, and increased exposure from pyramiding are key risks.

Tags

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