QQE: Smoothed RSI with Volatility-Based Trailing Levels
Summary
Qualitative Quantitative Estimation (QQE) extends RSI by smoothing it and adding fast and slow volatility-based trailing levels. The document describes deriving these levels from changes in the smoothed RSI, with the fast line compared against a slower trailing line. A fast-line cross above the slow line is treated as bullish, while a cross below is bearish; the position of the indicator relative to 50 can also indicate directional bias, and a middle band around 40–60 is presented as a sideways-market zone.
The settings shown include a 14-period RSI and a smoothing factor of 5. The document also provides backtest settings for BTC/USDT futures over a limited historical interval, but reports no performance statistics, so it offers no evidence that the signals are profitable. It warns that RSI-based signals can mislead during divergences. Crossovers are therefore signal rules, not guarantees, and the proposed approach does not establish how it performs across other instruments or market regimes.
Key ideas
- QQE combines a smoothed RSI with fast and slow volatility-based trailing levels.
- The fast line’s position relative to the slow line is used to infer trend direction.
- Crosses between the fast and slow lines, or crosses of the 50 level, can define trade signals.
- A middle band around 40–60 is described as a possible sideways-market filter.
- RSI divergences can produce false signals, and the stated backtest settings do not include performance results.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.