Relative Body Index Crossovers with EMA Filtering and Trailing Exits

Summary

This trend following approach derives a relative body value from each candlestick: the candle body divided by its full high to low range, positive for an up candle and negative for a down candle. The value ranges from -1 to 1, and a moving average of it forms the Relative Body Index (RBI). Crosses between RBI and its signal line provide directional signals. The described method also filters long entries with the close above a 13 period EMA and short entries with the close below it, then applies fixed stop and trailing profit controls.

The document argues that averaging candle body information can smooth noise, while the price filter may reject some trades. It warns that RBI signals and parameters can fail in particular conditions, and that tight or wide stops create different risks. It suggests testing parameters, adding filters, and managing overall exposure. A BTC/USDT futures backtest setup and parameter list are provided, but no performance results. The source code's exclusion level appears in indicator plots but is not clearly used in its entry conditions, and its signal logic should be checked against the narrative before relying on it.

Key ideas

• Relative body is the signed ratio of candle body size to the full candle range.
• A moving average of relative body values is compared with a signal line for trade signals.
• The described strategy filters directional entries using the close relative to a 13 period EMA.
• Fixed stop loss and trailing profit settings are intended to manage open positions.
• The document gives backtest settings but no results, and the source's use of its exclusion level is unclear.

Tags

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