I suppose nothing drives a point home like a 10+ year backtest! A couple of weeks ago I published a custom indicator called the Cumulative RSI. This indicator was straight out of chapter 9 of "Short Term Trading Strategies That Work." Today I am publishing a basic sample strategy in that uses the Cumulative RSI as its only entry and exit signals on a Nasdaq 100 leveraged index ETF (TQQQ). In this example, the indicator is being used as a longer term strategy with just 10% leverage over the account equity and a 25K start balance.
If I had it 10 years ago I would probably be retired! I'm sharing because I've found that it can provide an edge when determining exit/take profit points for trades. Many traders wait for a price reversal / trailing-stop to exit a trade when it starts losing. I've found that, using tools like the Cumulative RSI, you can achieve better exit points over the long term. Disclaimer: Even though this example significantly beats buy and hold, I wouldn't advise using it as a stand-alone strategy without significant additions/modifications to strategy and risk management functions.
Does it works for lower timeframe say 5min/15min/30min? If so what should be the parameters.
FW053329
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Great approch this script!!! I´ll try to enhance it with MACD indicator and/or Parabolic Sar in order to get later and lower entry values for the Buy in condition.
mathenger
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If you use an RSI with a large cycle of 100 or more, there is almost no divergence effect, so the effect of this script will be even better. How about my opinion?
syedmahm
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Hello, Is it possible to add an alert please? I am wondering if it is possible to get an alert when the condition meets and trade at the next market open. This strategy uses closing price in the backtesting. Can it be changed to opening price of the next day/bar in the backtesting? Thank you!
TradeAutomation
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@syedmahm, If you would to modify a script and you don't code in Pine, your best bet is to hire a PineCoder. I do custom coding as a service that you can book at TradeAutomation.net . TradingView also has a list of trusted Pine Coders you can find by searching for "Pine Programmer" in the help center.
amazedBustard43733
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Hi, I have a Study Error message when I use this script. What should I do? Thanks
TradeAutomation
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@amazedBustard43733, Hey, what does the error message say? Also, what chart/ticker/timeframe are you applying it to? Need a bit more info to help.
elsidaliaj
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no offense but kinda useless max drawdowns of like 60%, oversold / overbought reversed, don't really understand the point of it.
Wormhole007
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It works great! Is there any similar strategy script for SPX? I tried setting RSI 95 and 21 for SPX. It gave similar return to Buy and Hold but couldn't beat.
TradeAutomation
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@Venus001, If you trade the S&P500 via SPXL, the backtest beats buy and hold with default settings over the past ~5 years. Over ~10 years it backtests better with the oversold level in the 92-93 range. When I trade indexes I tend to trade the leveraged ETFs.