This strategy will enter a long trade when the 21 EMA crosses over the 55 EMA and both EMAs and the close price are above the 200 EMA (long-term trend). It will enter a short trade when the 21 EMA crosses under the 55 EMA and both EMAs and the close price are below the 200 EMA.
It will exit a long trade when the RSI crosses under from overbought and indicates that the uptrend could be coming to an end. It will exit a short trade when the RSI crosses over from oversold and indicates that the downtrend could be coming to an end.
Backtesting shows that it works best on:
30 MIN:
SYMBOL - PROFIT FACTOR
AUDCAD - 1.126
EURJPY - 1.12
EURNZD - 1.04 EURUSD - 1.65 GBPAUD - 1.27
USDCAD - 1.08
1 HR:
SYMBOL - PROFIT FACTOR
CADJPY- 1.23
EURNZD- 1.166
GBPJPY- 1.23
GBPUSD- 1.282
NZDJPY- 1.246
USDCHF- 1.344
3 HR:
SYMBOL - PROFIT FACTOR CADCHF- 1.975 EURGBP- 1.776 EURNZD- 1.911
GBPAUD- 1.364
GBPCHF- 1.311
USDJPY- 1.162 *XAUUSD - 2.00
As always, this strategy does not guarantee you to achieve profits and you should always use confirmations before entering a trade.
Nice strategy. However, what will happen if a Short signal is given and then RSI stays in the overbought zone for a prolonged period or vice-versa
UnknownUnicorn8106969
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@AkmeAnalytics, It would make a potentially short-lasting short position, but most of the time RSI isn't in the overbought zone for a crossunder signal to be given.
The strategy isn't perfect and is in V1, there's room for improvement. Will try and look into overcoming this though.
UnknownUnicorn8106969
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@BrendanW98, Scrap that, if a short positions entered while RSI was overbought, the short position wouldn't be closed until there is a crossover in the oversold area (i.e. RSI goes down to oversold and crosses back above that level).