RSI 30/70 Threshold Entries with Chart Bar Coloring

Summary

This script uses a 14-period Relative Strength Index with adjustable overbought and oversold thresholds, set by default to 70 and 30. When RSI falls below the lower threshold, it enters a long position; when RSI rises above the upper threshold, it closes that position. It also colors bars red below the lower threshold and green above the upper threshold, leaving bars uncolored between the levels, and provides chart plots and alert conditions.

The document offers an executable rule set and parameter defaults, but no backtest results or evidence that the thresholds identify profitable reversals. The rules treat oversold RSI as a long entry and an overbought reading as an exit, so they may be poorly suited to persistent declines or strong trends where RSI can remain extreme. Position size is configured as 10% of equity. No explicit stop-loss or profit target is shown, and the description's momentum interpretations do not establish that a signal predicts a reversal or continuation.

Key ideas

• The default RSI length is 14, with adjustable lower and upper thresholds set to 30 and 70.
• A reading below the lower threshold opens a long position, while a reading above the upper threshold closes it.
• Bars are colored red below the lower threshold and green above the upper threshold.
• The strategy sets position size to 10% of equity and does not specify an explicit stop-loss.
• No performance testing is provided, so the signal's effectiveness is unestablished.

Tags

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