RSI, OBV, EMA, and ADX Filters for Reversal Signals

Summary

This framework combines RSI extremes with changes in On-Balance Volume and an ADX threshold to screen potential reversal trades. The stated long setup uses oversold RSI with rising OBV; the short setup uses overbought RSI with falling OBV. ADX is intended to exclude weak or sideways conditions, and the document describes price relative to an EMA as an optional trend filter. Each indicator filter can be enabled or disabled.

The document lists example settings and backtest dates for ETH futures, but gives no outcome statistics. It warns that indicator parameters are sensitive, stacked filters can miss trades, ADX may be set too high, and the strategy lacks explicit stop-loss rules. A notable implementation gap is that the source plots the EMA but does not apply price-versus-EMA checks to its entry conditions, despite the prose describing that filter. The source therefore does not fully implement the described logic, and the supplied setup does not demonstrate trading performance.

Key ideas

• RSI extremes and the direction of OBV change form the core reversal signals.
• ADX is used to require a strong trend environment before taking signals.
• The narrative describes an EMA trend filter, but the source does not use EMA in its entry rules.
• The described implementation has no explicit stop-loss mechanism and may be sensitive to settings.
• The document provides a test configuration but no performance evidence.

Tags

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