This strategy integrates Bollinger Bands, Relative Strength Index (RSI) and Exponential Moving Average (EMA) three indicators to implement an automatic trading strategy with long holding periods for stocks. It generates buy signals when RSI is below oversold line and price is close to or touches the Bollinger Bands lower rail, and generates sell signals when price rises to touch the Bollinger Bands upper rail, utilizing Bollinger Bands to determine market trends and overbought/oversold status for double confirmation.
This strategy mainly judges based on Bollinger Bands, RSI and EMA three indicators. The middle rail in Bollinger Bands is the simple moving average of price, and the upper and lower rails are two standard deviation ranges of price. Bollinger Bands can judge the overbought/oversold status of the market. When price is close to the lower rail, it indicates oversold status, and when price is close to the upper rail, it indicates overbought status. RSI is one of the important indicators to judge whether a stock is overbought or oversold. RSI below 30 indicates oversold status and RSI above 70 indicates overbought status. EMA is the exponential weighted moving average of price and can determine price trend.
The buy signal for this strategy is generated when RSI is below the 30 oversold line, and at the same time price has approached or touched the Bollinger Bands lower rail in oversold status. This avoids false signals.
The sell signal is generated when price touches the Bollinger Bands upper rail during an uptrend. This utilizes Bollinger Bands to determine overbought status and sells for profit taking.
Solutions:
The strategy can be further optimized in the following aspects:
The strategy integrates Bollinger Bands, RSI and EMA for a long holding automatic trading strategy with double confirmation filters. The double confirmation for overbought/oversold status avoids false signals effectively, and using EMA for trend determination prevents trading against the trend. Meanwhile, flexible parameter settings make it adaptable to different stocks. Further improvement in aspects of stop loss and exit mechanisms can enhance the strategy’s efficiency and risk management. The strategy provides a valuable reference framework for beginners and has practical significance.
/*backtest start: 2023-12-21 00:00:00 end: 2023-12-28 00:00:00 period: 3m basePeriod: 1m exchanges: [{"eid":"Futures_Binance","currency":"BTC_USDT"}] */ //@version=4 strategy("Bollinger + RSI + EMA, Double Strategy Long-Only (by ChartArt) v1.3", shorttitle="rsi 30 min ADJ Buy", overlay=true) ///////////// RSI RSIlength = input(2, title="RSI Period Length") // Adjusted RSI period length RSIoverSold = input(30, title="RSI Oversold Level") // Adjustable RSI oversold level RSIoverBought = input(80, title="RSI Overbought Level") // Adjustable RSI overbought level price = close vrsi = rsi(price, RSIlength) ///////////// Bollinger Bands BBlength = input(231, minval=1, title="Bollinger Period Length") // Adjusted Bollinger period length BBmult = 2 BBbasis = sma(price, BBlength) BBdev = BBmult * stdev(price, BBlength) BBupper = BBbasis + BBdev BBlower = BBbasis - BBdev ///////////// EMA useEMA = input(true, title="Use EMA?") emaLength = input(20, title="EMA Period Length") ema = useEMA ? ema(close, emaLength) : na source = close buyEntry = crossover(source, BBlower) or (close < BBlower and close > BBbasis) or (low < BBlower and close > BBbasis) // Add condition for low touching Bollinger Band sellEntry = crossunder(source, BBupper) ///////////// Plotting plot(BBbasis, color=color.aqua, title="Bollinger Bands SMA Basis Line") plot(BBupper, color=color.silver, title="Bollinger Bands Upper Line") plot(BBlower, color=color.silver, title="Bollinger Bands Lower Line") plot(ema, color=color.orange, title="EMA") // Plot EMA ///////////// RSI + Bollinger Bands Strategy long = crossover(vrsi, RSIoverSold) and buyEntry close_long = close >= BBupper if (not na(vrsi)) if long strategy.entry("Buy", strategy.long, qty=10, stop=BBlower, comment="Buy") else strategy.cancel(id="Buy") if close_long strategy.close("Buy")template: strategy.tpl:40:21: executing "strategy.tpl" at <.api.GetStrategyListByName>: wrong number of args for GetStrategyListByName: want 7 got 6