EMA Crossings with RSI- Coinrule Strategy of the Week 12
This week's strategy utilises Exponential Moving Averages (EMAs) and the Relative Strength Index (RSI) to enter trades. This strategy does not require TradingView signals and is available as a template on Coinrule meaning it is very straightforward to run.
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Hi there, and welcome to Coinrule’s 12th strategy of the week video. This week's strategy will utilise Exponential Moving Averages (or EMAs) and the relative strength index (or RSI) to enter trades. This strategy will not require TradingView signals and is available as a template on Coinrule meaning that it will be extremely easy to set up and start running. We do also have the associated script for this strategy available on TradingView. So, if you want to backtest it, you’ll be able to do that. More on that later.
EMAs are a type of moving average that places a greater weight and significance on the most recent data points. The exponential moving average is also referred to as the exponentially weighted moving average. An exponentially weighted moving average reacts more significantly to recent price changes than a simple moving average simple moving average (SMA), which applies an equal weight to all observations in the period.
The relative strength index is a momentum indicator used in technical analysis. It measures the speed and magnitude of a coin's recent price changes to evaluate overvalued or undervalued conditions in the price of that coin. The RSI is displayed as an oscillator (a line graph essentially) on a scale of zero to 100. When the RSI reaches oversold levels, it can provide a signal to go long. When the RSI reaches overbought levels, it can mark a good exit point or alternatively, an entry for a short position. Traditionally, an RSI reading of 70 or above indicates an overbought situation. A reading of 30 or below indicates an oversold condition.
To enter trades, the strategy looks for all of the following conditions to be met:
-EMA8 to cross above EMA55. Just like in this example here. Remember, a fast period ema crossing above a slow period ema is a buy signal, and vice versa.
-RSI to be below 70
-RSI increase by 5.
To exit trades, the strategy looks for either of the following conditions to be met:
-EMA55 to cross above EMA8
-Price to increase by 7% from entry.