Simple RSI and SMA Long and Short

The Simple RSI and SMA Long and Short indicator is a momentum-following trend strategy designed to identify entries based on the confluence of a Simple Moving Average (SMA) crossover and Relative Strength Index (RSI) positioning.

Usage

This script identifies market trends by observing the relationship between two moving averages and a momentum oscillator. Traders can use this tool to automate or signal entries when the price shows both trend direction (via SMA) and momentum confirmation (via RSI).

• Long Entry: Triggered when the Fast SMA (default 100) crosses above the Slow SMA (default 150) while the RSI is above 50.
• Short Entry: Triggered when the Fast SMA crosses below the Slow SMA while the RSI is below 50.
• Exits: A long position is closed when the conditions for a short trade are met, and vice versa, creating a continuous "always-in-the-market" approach during active trend cycles.

Details

The strategy combines a trend-following component (SMAs) with a momentum filter (RSI). By requiring the RSI to be above or below the 50 level, the script filters out weak trend crossovers that lack sufficient momentum. The default backtesting period is set from January 1st, 2022, to evaluate performance during various market regimes, including bear markets. The strategy uses a default position size of 30% of equity per trade and incorporates a 0.1% commission to simulate realistic trading environments such as those found on major exchanges.

Settings

Inputs

• Show Date Range: Toggles the visibility/activation of the specific date range for the strategy backtest.
• RSI Length: Determines the lookback period for the Relative Strength Index calculation (default is 14).
• Fast SMA Length: Sets the period for the shorter moving average used for crossover detection (default is 100).
• Slow SMA Length: Sets the period for the longer moving average used for crossover detection (default is 150).

FAQ

How do I interpret the signals on the chart?

A long signal occurs when the green (Fast) SMA crosses above the blue (Slow) SMA and the RSI is in bullish territory (>50). A short signal occurs when the reverse happens.

Can I adjust the sensitivity of the strategy?

Yes, by reducing the SMA lengths or the RSI length in the settings, you can make the strategy more reactive to price changes, though this may increase the number of false signals.

How can I access the Simple RSI and SMA Long and Short?

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