RSI-Triggered ARB Short Strategy with Fixed DCA Averaging Orders

Summary

This is a short-only averaging strategy for ARB perpetual futures. A downward cross of an overbought RSI threshold on a four-hour timeframe starts a short. If price rises against the position, up to two averaging orders are placed at fixed percentage deviations above the original entry, with each order larger than the previous one. A take-profit order closes the combined position at a specified percentage below its average entry.

The displayed defaults specify RSI length 14, a crossing level of 74, averaging orders at 5% and 10% above the base entry, order sizes of 850 and 1,445 USDT after a 500 USDT base, and a 6% take profit. The document describes no stop loss and argues that the finite averaging ladder bounds further additions; that does not cap losses if price keeps rising. Although it includes a date window and simulation settings in the source comments, the supplied text contains no performance results. Strategy parameters and risk claims should therefore be assessed independently.

Key ideas

• A short begins when four-hour RSI crosses downward through the configured overbought level.
• The strategy permits two averaging orders at fixed adverse price deviations, with order size increasing at each rung.
• The combined position exits at a fixed percentage profit relative to its average entry price.
• The defaults specify ARB perpetual futures, a 14-period RSI, a 74 crossing level, and a 6% take profit.
• There is no stop loss, and a bounded number of additions does not limit losses if price continues upward.

Tags

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