RSI Threshold Entries with Percentage-Based Stops and Targets

Summary

This strategy uses RSI threshold crossings to enter positions and sets stop loss and take profit levels as percentages of the average entry price. A move below the oversold level is intended to open a long position, while a move above the overbought level opens a short. The general description gives default thresholds of 30 and 70, while the listed strategy parameters specify 35 and 65; the RSI length is 14. The listed stop and target percentages are 5% and 10%, respectively, with stop and target prices placed on opposite sides of entry for long and short positions.

The document presents automated exits as a way to bound losses and define profit-taking, while cautioning that RSI signals can be wrong and that percentage distances may be too wide or too tight for current conditions. It suggests tuning parameters, adding signal filters, using trend rules, and considering trailing stops. The published backtest settings cover BTC/USDT futures on an hourly period for about a month, but no results are reported. The supplied source excerpt ends before the exit orders are shown, so implementation of the stated exits cannot be confirmed from the excerpt.

Key ideas

• The strategy opens longs on an RSI move below the oversold threshold and shorts on a move above the overbought threshold.
• Stop losses and take profit levels are defined as percentages of average entry price.
• The parameter list gives an RSI length of 14, thresholds of 35 and 65, a 5% stop, and a 10% target.
• Thresholds and percentage exits may need adjustment, and RSI can generate false signals.
• The listed backtest configuration includes no performance results, and the source excerpt omits the exit-order implementation.

Tags

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