RSI Bullish/Bearish Divergence Trading Strategy
This strategy identifies regular and hidden bullish/bearish RSI divergence signals to determine long and short positions.
When price makes a new high and RSI fails to make a new high, it forms bullish divergence, which is treated as selling signal. When price makes a new low and RSI fails to make a new low, it forms bearish divergence, which is treated as buying signal. Regular divergence refers to the obvious divergence between price and RSI while hidden divergence means relatively concealed divergence between them. Long or short positions are determined based on identified regular or hidden bullish/bearish divergence signals.
This strategy identifies RSI divergence trading signals based on regular and hidden bullish/bearish divergence to determine long or short positions, which provides relatively higher winning rate. Further improvements on strategy effectiveness could be achieved by optimizing RSI parameters, adding other validating indicators.
/*backtest start: 2023-12-22 00:00:00 end: 2024-01-21 00:00:00 period: 1h basePeriod: 15m exchanges: [{"eid":"Futures_Binance","currency":"BTC_USDT"}] */ //@version=5 strategy(title="Divergence Indicator") len = input.int(title="RSI Period", minval=1, defval=14) src = input(title="RSI Source", defval=close) lbR = input(title="Pivot Lookback Right", defval=5) lbL = input(title="Pivot Lookback Left", defval=5) rangeUpper = input(title="Max of Lookback Range", defval=60) rangeLower = input(title="Min of Lookback Range", defval=5) plotBull = input(title="Plot Bullish", defval=true) plotHiddenBull = input(title="Plot Hidden Bullish", defval=true) plotBear = input(title="Plot Bearish", defval=true) plotHiddenBear = input(title="Plot Hidden Bearish", defval=true) bearColor = color.red bullColor = color.green hiddenBullColor = color.new(color.green, 80) hiddenBearColor = color.new(color.red, 80) textColor = color.white noneColor = color.new(color.white, 100) osc = ta.rsi(src, len) plot(osc, title="RSI", linewidth=2, color=#2962FF) hline(50, title="Middle Line", color=#787B86, linestyle=hline.style_dotted) obLevel = hline(70, title="Overbought", color=#787B86, linestyle=hline.style_dotted) osLevel = hline(30, title="Oversold", color=#787B86, linestyle=hline.style_dotted) fill(obLevel, osLevel, title="Background", color=color.rgb(33, 150, 243, 90)) plFound = na(ta.pivotlow(osc, lbL, lbR)) ? false : true phFound = na(ta.pivothigh(osc, lbL, lbR)) ? false : true _inRange(cond) => bars = ta.barssince(cond == true) rangeLower <= bars and bars <= rangeUpper //------------------------------------------------------------------------------ // Regular Bullish // Osc: Higher Low oscHL = osc[lbR] > ta.valuewhen(plFound, osc[lbR], 1) and _inRange(plFound[1]) // Price: Lower Low priceLL = low[lbR] < ta.valuewhen(plFound, low[lbR], 1) // bull : 상승 Condition : 조건 bullCond = plotBull and priceLL and oscHL and plFound // 상승다이버전스? strategy.entry("상승 다이버전스 진입", strategy.long, when = bullCond) strategy.close("상승 다이버전스 진입", when = ta.crossover(osc, 50)) plot( plFound ? osc[lbR] : na, offset=-lbR, title="Regular Bullish", linewidth=2, color=(bullCond ? bullColor : noneColor) ) plotshape( bullCond ? osc[lbR] : na, offset=-lbR, title="Regular Bullish Label", text=" Bull ", style=shape.labelup, location=location.absolute, color=bullColor, textcolor=textColor ) //------------------------------------------------------------------------------ // Hidden Bullish // Osc: Lower Low oscLL = osc[lbR] < ta.valuewhen(plFound, osc[lbR], 1) and _inRange(plFound[1]) // Price: Higher Low priceHL = low[lbR] > ta.valuewhen(plFound, low[lbR], 1) hiddenBullCond = plotHiddenBull and priceHL and oscLL and plFound // strategy.entry("히든 상승 다이버전스 진입", strategy.long, when = hiddenBullCond) // strategy.close("히든 상승 다이버전스 진입", when = ta.crossover(osc, 50)) plot( plFound ? osc[lbR] : na, offset=-lbR, title="Hidden Bullish", linewidth=2, color=(hiddenBullCond ? hiddenBullColor : noneColor) ) plotshape( hiddenBullCond ? osc[lbR] : na, offset=-lbR, title="Hidden Bullish Label", text=" H Bull ", style=shape.labelup, location=location.absolute, color=bullColor, textcolor=textColor ) //------------------------------------------------------------------------------ // Regular Bearish // Osc: Lower High oscLH = osc[lbR] < ta.valuewhen(phFound, osc[lbR], 1) and _inRange(phFound[1]) // Price: Higher High priceHH = high[lbR] > ta.valuewhen(phFound, high[lbR], 1) // bear : 하락 bearCond = plotBear and priceHH and oscLH and phFound // strategy.entry("하락 다이버전스 진입", strategy.short, when = bearCond) // strategy.close("하락 다이버전스 진입", when = ta.crossunder(osc, 50)) plot( phFound ? osc[lbR] : na, offset=-lbR, title="Regular Bearish", linewidth=2, color=(bearCond ? bearColor : noneColor) ) plotshape( bearCond ? osc[lbR] : na, offset=-lbR, title="Regular Bearish Label", text=" Bear ", style=shape.labeldown, location=location.absolute, color=bearColor, textcolor=textColor ) //------------------------------------------------------------------------------ // Hidden Bearish // Osc: Higher High oscHH = osc[lbR] > ta.valuewhen(phFound, osc[lbR], 1) and _inRange(phFound[1]) // Price: Lower High priceLH = high[lbR] < ta.valuewhen(phFound, high[lbR], 1) hiddenBearCond = plotHiddenBear and priceLH and oscHH and phFound // strategy.entry("히든 하락 다이버전스 진입", strategy.short, when = hiddenBearCond) // strategy.close("히든 하락 다이버전스 진입", when = ta.crossunder(osc, 50)) plot( phFound ? osc[lbR] : na, offset=-lbR, title="Hidden Bearish", linewidth=2, color=(hiddenBearCond ? hiddenBearColor : noneColor) ) plotshape( hiddenBearCond ? osc[lbR] : na, offset=-lbR, title="Hidden Bearish Label", text=" H Bear ", style=shape.labeldown, location=location.absolute, color=bearColor, textcolor=textColor )template: strategy.tpl:40:21: executing "strategy.tpl" at <.api.GetStrategyListByName>: wrong number of args for GetStrategyListByName: want 7 got 6