Automating the RSI to profit from volatility

28 พ.ย. 2019

Designing your automated strategy
For today’s analysis, we have chosen two markets: XRP/BTC and EOS/BTC, a couple of the most liquid BTC trading pairs.

We have selected 1 hour candle size and the indicator RSI With Region Crossover. First of all, let’s understand what this variant from the RSI will do in our strategy:

RSI with region crossovers gives the user the option to open or close positions only at crossover with the oversold and overbought thresholds, not when the RSI enters, for example, the oversold zone, but when it exits it. In this way, your bot will only open positions once the price is oversold and is recovering positive momentum (the price is going back up).

Whit this setup, we want to open positions once: 1st. price has fallen quick enough to be oversold and 2nd the price is crossing from the oversold to the neutral zone. Therefore, it open positions when the price is more likely to go back up.

Chart
As we can see in the chart, The bot would have open positions once the RSI goes from the oversold to the neutral zone. Then, having more chances to get a positive trade.

The green circles represent the buy zones and the sells would depend on your take profit, trailing stop-loss or strategy.