RSI and Volume Exhaustion with Liquidity-Sweep Reversal Entries

Summary

This strategy combines RSI extremes, elevated volume, recent price extremes, and liquidity sweeps to identify possible exhaustion. A bullish setup requires low RSI, volume above its recent average by a configurable factor, and either a lower low or a sweep below a recent low that closes back above it. The bearish setup mirrors these conditions at highs. Each setup remains eligible for entry for a limited window of bars.

Entry requires a close to cross the prior bar’s high or low in the reversal direction, along with RSI turning in that direction and no open position. An opposite exhaustion signal closes an existing trade. The source code specifies the RSI and volume calculations, pool lookback, entry window, and exit rules; it does not include reported performance tests. The accompanying prose mentions an EMA-based safety exit, but that rule is absent from the supplied strategy code. Results may also depend on instrument, timeframe, execution assumptions, and parameter choices.

Key ideas

• The strategy defines exhaustion using an RSI extreme, unusually high volume, and a fresh price extreme or a sweep and reclaim of a recent range boundary.
• A detected setup stays active for a configurable number of bars while the strategy waits for price and RSI confirmation.
• Entries trigger on a close crossing the previous bar’s high or low in the reversal direction.
• An opposite exhaustion condition closes an open position in the supplied code.
• The prose describes an EMA exit that does not appear in the supplied source code.

Tags

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