Tags:

This strategy utilizes Bollinger Bands to determine if price has entered the overbought area and combines RSI indicator to identify callback opportunities. It goes short when a death cross is formed in the overbought area and stops out when price rises back above the Bollinger Upper Band.

The strategy is based on the following principles:

- When close price crosses above Bollinger Upper Band, it indicates the asset has entered overbought territory and a callback is likely
- RSI indicator effectively determines overbought/oversold levels. RSI > 70 is considered overbought
- Go short when close price crosses below Upper Band
- Close position when RSI pulls back from overbought zone or stop loss is triggered

Advantages of this strategy:

- Bollinger Bands determine overbought/oversold levels accurately, improving trade success rate
- RSI filters out false breakout signals, avoiding unnecessary losses
- High risk to reward ratio obtained by effectively controlling risk

Risks in this strategy:

- Price may continue going up after breaking above Upper Band, leading to further losses
- Failure of timely RSI pullback results in loss amplification
- Unidirectional short position leaves no room for trading in consolidation

Risks can be minimized by:

- Adjusting stop loss properly for timely stop out
- Adding indicators to confirm RSI callback
- Using moving averages to determine consolidation

This strategy can be improved on:

- Optimizing Bollinger parameters for more assets
- Fine tuning RSI parameters for better signals
- Adding more indicators to pinpoint trend reversal points
- Incorporating long trade logic
- Implement dynamic stop loss based on volatility

In summary, this is a typical overbought quick short scalping strategy. It capitalizes on Bollinger Bands for trade entries and RSI to filter signals. Risk is managed through prudent stop loss placement. Further enhancements can come from parameter tuning, adding indicators, expanding trade logic etc.

/*backtest start: 2023-11-01 00:00:00 end: 2023-11-30 23:59:59 period: 1h basePeriod: 15m exchanges: [{"eid":"Futures_Binance","currency":"BTC_USDT"}] */ //@version=5 // This source code is subject to the terms of the Mozilla Public License 2.0 at https://mozilla.org/MPL/2.0/ // © Coinrule strategy("Bollinger Band Below Price with RSI", overlay=true, initial_capital=1000, process_orders_on_close=true, default_qty_type=strategy.percent_of_equity, default_qty_value=70, commission_type=strategy.commission.percent, commission_value=0.1) showDate = input(defval=true, title='Show Date Range') timePeriod = time >= timestamp(syminfo.timezone, 2022, 1, 1, 0, 0) notInTrade = strategy.position_size <= 0 //Bollinger Bands Indicator length = input.int(20, minval=1) src = input(close, title="Source") mult = input.float(2.0, minval=0.001, maxval=50, title="StdDev") basis = ta.sma(src, length) dev = mult * ta.stdev(src, length) upper = basis + dev lower = basis - dev offset = input.int(0, "Offset", minval = -500, maxval = 500) plot(basis, "Basis", color=#FF6D00, offset = offset) p1 = plot(upper, "Upper", color=#2962FF, offset = offset) p2 = plot(lower, "Lower", color=#2962FF, offset = offset) fill(p1, p2, title = "Background", color=color.rgb(33, 150, 243, 95)) // RSI inputs and calculations lengthRSI = 14 RSI = ta.rsi(close, lengthRSI) // Configure trail stop level with input options longTrailPerc = input.float(title='Trail Long Loss (%)', minval=0.0, step=0.1, defval=3) * 0.01 shortTrailPerc = input.float(title='Trail Short Loss (%)', minval=0.0, step=0.1, defval=3) * 0.01 // Determine trail stop loss prices //longStopPrice = 0.0 shortStopPrice = 0.0 //longStopPrice := if strategy.position_size > 0 //stopValue = close * (1 - longTrailPerc) //math.max(stopValue, longStopPrice[1]) //else //0 shortStopPrice := if strategy.position_size < 0 stopValue = close * (1 + shortTrailPerc) math.min(stopValue, shortStopPrice[1]) else 999999 //Entry and Exit strategy.entry(id="short", direction=strategy.short, when=ta.crossover(close, upper) and RSI < 70 and timePeriod and notInTrade) if (ta.crossover(upper, close) and RSI > 70 and timePeriod) strategy.exit(id='close', limit = shortStopPrice)

- Inertia Indicator Trading Strategy
- Bollinger Band RSI Dual Line Strategy
- Dynamic Support Resistance Breakout Trend Strategy
- Rainbow Oscillator Backtesting Strategy
- Larry Williams' Moving Average Crossover Strategy
- Oscillator Differential Moving Average Timing Strategy
- A DMI & Stochastic Trading Strategy with Dynamic Stop-loss
- Dual-Factor Combo Reversal and Mass Index Strategy
- Quantitative Trading Strategy Based on Double Trend Filter
- Stochastic RSI Momentum Oscillation Trading Strategy
- Moving Average Crossover Strategy
- Trend Tracking Strategy Based on Dynamic Pivot Bands
- Bollinger Bands Momentum Trend Following Strategy
- Dynamic Buying Selling Volume Breakout Strategy
- Supertrend MACD Quantitative Strategy
- 4 EMA Trend Strategy
- Bitcoin Trading Strategy Based on Quantitative Indicators
- Last N Candle Reverse Logic Strategy
- Trend Tracking Breakout Strategy
- Simple Buy Low Sell High Strategy