RSI-Gated Value Trend Entries with Averaging Down and Momentum Exits

Summary

This long-only strategy uses a custom value-trend measure alongside RSI. It normalizes closing prices within a rolling price range, smooths that series, and triggers a potential entry when the value-trend measure crosses above a threshold after RSI has entered oversold territory. The entry state resets after a trade begins, and the strategy permits an additional purchase if price falls substantially below the most recent entry price.

For exits, it waits for RSI to enter a high-value band and close the full position only when price is above average entry cost by a small buffer. Alerts mark initial entries, additional purchases, and exits. The document provides implementation rules but no performance results or market-specific tests. Averaging down can increase exposure while a position is losing, and the exit condition may leave trades open until both its RSI and profitability requirements are met. The chosen thresholds, position sizing, and behavior across assets and timeframes need testing before the method can be assessed.

Key ideas

• The entry requires both an oversold RSI event and an upward cross in a smoothed, range-normalized price measure.
• The strategy allows another long entry after price falls well below the latest entry price.
• A position closes only when RSI enters its specified upper band and price exceeds average cost by a buffer.
• The script supplies alerts but no evidence of historical or live profitability.
• Averaging down can increase exposure, and exit conditions may delay closing a position.

Tags

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