Trend Signals from a Smoothed RSI Crossover and Histogram

Summary

This strategy smooths closing prices with an exponential moving average before calculating RSI, then smooths the RSI again to create a signal line. It uses the difference between the two RSI series as a histogram. A bullish signal occurs when the modified RSI crosses above its signal line while the histogram is positive; a bearish signal occurs when it crosses below while the histogram is negative. The source submits long and short entries on those conditions, without explicit stops or position sizing.

The document gives adjustable settings for the price smoothing, RSI period, signal smoothing, and additional moving-average lengths, along with a BTC/USDT futures backtest configuration covering about a year of daily bars. It provides no backtest results, comparisons, or evidence that the modification improves on standard RSI. The stated limitations include false signals in range-bound markets, delayed turning points, and sensitivity to price noise. The moving-average inputs appear in the source but do not gate its trading signals.

Key ideas

• The method calculates RSI on an exponentially smoothed price series.
• A second exponential moving average of RSI serves as the signal line.
• The RSI-to-signal crossover and histogram sign jointly define long and short entries.
• The provided source does not show stop-loss, take-profit, or position-sizing rules.
• The document notes that sideways markets and delayed turns can weaken the signals.

Tags

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