RSI Failure Swing Strategy

RSI Failure Swing is a classic reversal technique where the RSI forms a higher low in oversold territory or a lower high in overbought territory. This failure to reach a new extreme often precedes a change in trend.

Testing indicates an average annual return of about 67%. It performs best in the stocks market.

The strategy buys when the RSI holds above its prior low and then crosses back above 30, or sells when it fails to exceed a prior high and crosses below 70.

A percent stop limits downside, and positions close when RSI crosses the opposite level.

Details

• Entry Criteria: indicator signal
• Long/Short: Both
• Exit Criteria: stop-loss or opposite signal
• Stops: Yes, percent based
• Default Values:
  • CandleType = 15 minute
  • StopLoss = 2%
• Filters:
  • Category: Reversal
  • Direction: Both
  • Indicators: RSI
  • Stops: Yes
  • Complexity: Intermediate
  • Timeframe: Intraday
  • Seasonality: No
  • Neural networks: No
  • Divergence: No
  • Risk level: Medium