[KL] RSI 14 + 10 Strategy

The [KL] RSI 14 + 10 Strategy tool leverages dual Relative Strength Index (RSI) periods to identify oversold entry points and overbought exit conditions with additional trend confirmation.

Usage

The strategy is primarily designed for daily and hourly timeframes to capture medium-term momentum shifts. A long position is triggered when the standard 14-period RSI falls below a user-defined threshold (defaulting to 40) and the 10-period RSI is lower than the 14-period RSI, acting as a momentum confirmation.

Exits can be managed through three primary methods:

• RSI Threshold: Positions close when the RSI 14 reaches the upper threshold (default 70) and the RSI 10 is higher than the RSI 14.
• Risk:Reward Target: An optional mode that closes the position once a specific reward ratio relative to the initial ATR-based risk is met.
• Trailing Stop Loss: A dynamic stop loss based on an ATR multiplier that protects capital as the price moves in favor of the trade.

Details

This strategy implements a multi-period RSI approach to filter out premature entries. By requiring the faster RSI (10) to be below the slower RSI (14) during an oversold condition, it ensures that the downward momentum is exhaustive before entering.

The strategy also includes a robust backtesting engine allowing users to define specific start and end dates. Risk management is handled via ATR-based calculations, where the initial stop loss and trailing buffer are determined by the volatility of the asset at the time of entry.

Settings

Backtest Period

• Backtest Start/End Time: Defines the specific date range for the strategy simulation.
• Define ending period: Toggles whether the backtest should stop at a specific date or continue to the current candle.

Risk Management

• Exit when Risk:Reward met: Enables a fixed take-profit target based on a multiplier of the initial risk.
• Risk:[Reward]: Sets the target ratio for the fixed take-profit exit.
• Use trailing stop loss: Enables a dynamic stop loss that moves upward with the price.
• ATR multiplier for stop loss: Determines the distance of the stop loss from the price based on market volatility.

RSI Configuration

• RSI entry: The oversold level used for the RSI 14 entry signal.
• RSI exit: The overbought level used for the RSI 14 exit signal.

FAQ

How do I use the [KL] RSI 14 + 10 Strategy?

To use this strategy, add it to your chart and adjust the RSI Entry/Exit thresholds to suit the specific asset's volatility. Ensure you have the Trailing Stop Loss enabled if you prefer dynamic risk management.

Can I use this on low timeframes?

While the script was tested on daily and hourly charts, it can be applied to lower timeframes; however, users should adjust the ATR multiplier and RSI thresholds to account for increased market noise.

How do I access the script?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.