RSI-Filtered MACD Divergence Entries with Pip-Based Trade Controls
Summary
The document outlines a divergence trading setup that uses RSI to restrict when MACD divergence signals can open trades. A bullish divergence is considered for a long entry when RSI is below 30; a bearish divergence is considered for a short entry when RSI is above 70. The strategy also calls for configurable divergence settings and trade size, with stop loss and target specified in pips.
It provides entry conditions and basic trade-management inputs, but no backtest, market examples, or performance evidence. It does not explain how divergence is detected, how the RSI thresholds or pip distances should be chosen, or how positions should be closed beyond the stated stop and target. The approach is therefore a brief strategy specification rather than a validated system. Results may depend on the instrument, timeframe, execution costs, and the precise divergence rules used.
Key ideas
- Bullish MACD divergence is used for long trades when RSI is below 30.
- Bearish MACD divergence is used for short trades when RSI is above 70.
- Divergence settings, trade size, stop loss, and target are configurable inputs.
- The document gives no testing evidence or detailed rules for detecting divergence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.