Smoothed Stochastic RSI Entry with Trailing and Recent-Low Stops

Summary

The strategy computes RSI, applies a stochastic calculation to that RSI, then smooths the K and D lines with simple moving averages. A long entry occurs when K crosses above the oversold threshold, set to 20 by default. The exit order combines a trailing stop with a stop at the lowest low over a configurable recent window; the source defaults that lookback to 20 bars. The accompanying explanation describes sizing a position from the distance to the stop and a dollar risk allowance.

The document supplies indicator and stop parameters but no market, timeframe, backtest period, or performance results. The code calculates a risk-per-point quantity but never passes that value to the entry order, which instead uses the strategy's fixed-quantity default; the described risk-based sizing is therefore not implemented in the shown source. The prose also inconsistently refers to a move into the overbought region, while the actual trigger crosses above the oversold threshold. The logic only enters long, and trailing stops may be repeatedly triggered in volatile or sideways conditions.

Key ideas

• The entry signal is a smoothed Stochastic RSI K-line crossover above the oversold threshold.
• The exit combines a trailing stop with a stop based on a recent rolling low.
• The explanation describes dollar-risk-based sizing, but the source does not use its calculated quantity.
• The strategy only opens long positions and gives no documented backtest results.
• The prose's overbought description conflicts with the code's oversold crossover condition.

Tags

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