Trading RSI Divergence with EMA Trend and MACD Confirmation

Summary

This strategy combines RSI divergence with trend and momentum filters. A bullish setup occurs when price makes a lower low while RSI holds above its prior low; a bearish setup uses a higher price high with a lower RSI high. It then allows longs only above a 200-period EMA with a positive MACD histogram, and shorts only below the EMA with a negative histogram. The text also describes higher-timeframe trend context and lower-timeframe entries, although the included code does not implement a separate multi-timeframe data feed.

The document supplies indicator rules, a lookback setting of 30, and an example backtest configuration for ETH/USDT futures on one-minute bars over a short period. It reports no performance results, so it does not establish profitability or signal quality. Risks include divergence signals persisting against strong trends, parameter sensitivity, fixed stop distances, and fixed contract sizing. Suggested extensions include volatility-based stops, percentage risk sizing, volume confirmation, and market-regime filters.

Key ideas

• RSI divergence flags possible momentum weakening when price and RSI make opposing swing extremes.
• The strategy filters divergence signals with price relative to a 200-period EMA and MACD histogram direction.
• The description proposes higher-timeframe trend analysis with lower-timeframe entries, while the supplied code shows a single-chart implementation.
• The example configuration uses ETH/USDT futures on one-minute bars, but no backtest outcomes are reported.
• Fixed stops and fixed contract quantities may not adjust adequately to volatility or account risk.

Tags

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