How to create algo for RSI Crossover System?
How to create algo for RSI Crossover System?
Condition:
The Trading Idea is to Buy when short-term momentum crosses above long-term momentum and vice versa.
RSI is a oscillator which depicts momentum in prices. We try using two RSI of different periods to judge the short-term momentum and long-term momentum. So trade entries will be based on RSI indicator.
However, by construction, RSI gives a lot of whipsaws while it oscillates up and down. So trade exits are done using RSI levels to avoid too frequent re-entries.
So when it comes to trade condition,
Buy: When short-term RSI crosses above long-term RSI
Sell: When RSI goes below 40 level
