RSI-WMA Crossovers with EMA Trend Filtering and Candle-Based Exits
Summary
This strategy generates entries when the RSI crosses its weighted moving average, then filters direction using a 120-period EMA: longs require price above the EMA and shorts require price below it. Its listed indicator defaults use a 14-period RSI and a 45-period WMA of RSI. After an entry signal, the stop is placed at the more extreme low or high of the current and previous candles, depending on direction. A take-profit level is set from the entry-to-stop distance using a configurable risk-reward multiple.
The document explains the intended combination of momentum-style crossover signals, trend confirmation, and price-based risk controls. It notes potential weaknesses including EMA lag, repeated crossovers in sideways markets, and stops that may be poorly sized under very high or low volatility. A SOL/USDT futures daily backtest configuration is provided, but no performance measurements are reported. The text proposes further testing and possible additions such as volume confirmation or ATR-based stops; these are suggestions rather than demonstrated improvements.
Key ideas
- RSI crossing above or below its WMA produces potential long or short signals.
- The EMA filter permits longs above the average and shorts below it.
- Stops use the recent two-candle extreme, and profit targets scale the stop distance by a risk-reward setting.
- Sideways markets may generate frequent crossover signals, while recent-candle stops can be too wide or tight.
- A SOL/USDT futures test configuration is listed without reported performance results.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.