Short Term RSI and SMA Percentage Change- Coinrule Strategy of the Week 2
This week we take a look a strategy that focuses around using two simple indicators, the RSI and SMAs, to find appropriate entries for trades.
Link to TradingView script:
https://www.tradingview.com/script/4F...
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TradingView Account:
https://www.tradingview.com/u/Coinrul...
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0:11
Hello again, and welcome to Coinrule’s second strategy of the week video. This week's strategy is very simple and utilizes common indicators like the relative strength index, or RSI and moving averages, in order to enter and exit trades.
00:26
Later, I'm going to show you how to run the strategy on Coinrule using TradingView signals. The RSI is a technical indicator frequently used in trading. It works by measuring the speed and change of price movements to determine whether a coin is oversold (indicating a good entry point) or overbought, indicating a point of exit or an entry for a short position.
00:51
The RSI oscillates between zero and 100 and is traditionally considered overbought when over 70 and oversold when below 30.
00:59
The second indicator using this strategy is a simple moving average SMA. An SMA is an arithmetic moving average calculated by adding recent prices and then dividing that figure by the number of time periods in the calculation average. For example, one could add the closing price of a coin for a number of time periods and then divide this by that same number of periods.
01:21
Short term averages for example MA9 respond quickly to changes in the price of the underlying coin. While long term averages EG MA100 are slower to react.
01:31
Now, I will go over the entry and exit conditions of the strategy. The first entry condition requires that the relative strength index be greater than 50 that is above this middle line.
01:44
The second and third entry conditions that rely on moving averages first, we will require the MA9 is greater than MA100 as in this image here. Also the MA9 increases by 6%. The exit conditions utilize trailing take profits and stop losses. Essentially, the take profit and stop loss will adapt the price trend strength as illustrated in this diagram.
02:10
The take profit condition is a 5% price increase trailing and the stop loss condition is a 5% price decrease trailing. Next, I'm going to show you how to run the strategy on Coinrule using TradingView signals.
02:24
First, to run the strategy on Coinrule, you'll have to find it on our TradingView page. This is the name of the strategy here. I'll have the direct link to this in the description of the video so you don't need to find it manually.
02:37
Scroll down, and you'll see a description of the entry and exit conditions. This is just what we've been over. But it's here again for your reference, if you want to look at it in more detail, or check it again.
02:47
Scroll down and click add to your favorite indicators. And then come to the chart that you wish to test the strategy on. So I'm going to test it on MATIC USDT on 45-minute timeframe. So come to indicators, it will now be listed in your favorites and find the strategy. So this is the one in question. Click it, add it to the chart, you'll see you're provided with some back testing data at the bottom here.
03:13
So in 51 trades, the rule made $437 with $1,000 starting capital, this gives us a net profit of 43.73%. This rule is back tested from around May time. And also this data includes a trading fees of 0.1%, which is aligned to the base fee applied on Binance.
03:33
So if you're happy with the performance, to run the strategy on Coinrule, you simply come to Coinrule and create your strategy. So if TradingView signal is a buy, that I want to buy 1000 US dollars of MATIC because I'm happy with the performance advantage. And I wanted to run on that chart with my USDT wallet as a limit order.
03:55
And then if TradingView signal is a sell i.e. to close the position, then I want to sell 100% of the amount bought of that coin to my USDT wallet as a limit order. I wanted to start immediately execute a 100 times in total. And you'd have to name your strategy as well. So I'm going to launch this and you'll see you provide it with a web hook URL and a message.
04:18
So next, come back to TradingView, highlight the strategy up here. Come to these three dots and click Add alert. You'll see it’s provided with a box for the webhook URL and the message. So first, copy the webhook URL and paste it in here. And then, copy the message and paste it in the box down here. Click Create and come back to Coinrule and click Launch. Your strategy is now live on Coinrule.
04:52
I hope you enjoyed the strategy of the week video. Please reach out if you've got any questions.