Short Entries from RSI and SMA with Trailing Price Stops

Summary

This strategy combines a long-period simple moving average with a short-period RSI to generate short entries. The stated rule opens a short when RSI crosses above its entry threshold while price is below the SMA. It closes the position if RSI reaches a higher stop threshold, falls to a lower profit-taking threshold, or price rises above a trailing level. The supplied parameters use a 200-period SMA and 14-period RSI, with separate RSI levels for entry, stop, and profit taking.

The document presents the method as a simple example of a dual-indicator filter and lists limitations: fixed settings may not suit different markets or timeframes, and the approach omits volume, volatility, and trading costs. The published backtest settings describe BTC/USDT futures on a three-hour chart for a short historical interval, but no performance statistics are supplied. There is also a discrepancy between the description and code: the prose conditions entry on price being above the SMA, while the code requires it to be below. The trailing level is updated from successive lower closes and closed through a price comparison, so its behavior should be checked carefully before relying on it.

Key ideas

• The code opens short positions when RSI crosses above its entry threshold and price is below the SMA.
• The stated parameters use a 200-period SMA and 14-period RSI, with distinct entry, stop, and take-profit RSI levels.
• A trailing level follows new lower closes and can close the short when price rises above it.
• The written overview conflicts with the code about whether price should be above or below the SMA at entry.
• The described backtest has no reported results and excludes trading costs and other market filters.

Tags

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