Volume FIltered RSI Buy/Sell Stragety

2 days ago

Introduction
"Volume Filtered RSI Buy/Sell Strategy" is a technical trading tool designed for the BTCUSDT.P 5-minute chart. This strategy integrates the popular RSI momentum indicator with a volume-based filter, providing more reliable entry signals. It aims to capture high-probability trades by confirming bullish or bearish momentum crossovers with adequate volume support.

Overview
This strategy uses RSI to detect overbought or oversold market conditions and confirms them with a volume filter to weed out weaker signals. By doing so, it seeks to minimize false entries and improve the quality of each trade. An ATR- or fixed-percent-based stop-loss mechanism adds a robust risk management layer, while dynamic take-profit levels allow traders to lock in gains strategically.

Key Features

• RSI-Based Signals: Uses RSI to pinpoint when the market shifts from oversold to bullish or from overbought to bearish.
  
• Volume Filter: Ensures entries are validated by sufficient trading volume, reducing the likelihood of false breakouts.
  
• Flexible Stop-Loss Options: Choose between ATR-derived dynamic stop losses or fixed-percentage stop losses to best suit your risk appetite.
  
• Risk/Reward Settings: Easily configure your preferred risk-to-reward ratio to match your trading style.

Strategy Settings

1. RSI Length: Default 14. Adjust if you want quicker or smoother RSI responses.
   
2. Overbought/Oversold Levels: Default at 70/30, can be tweaked based on market conditions.
   
3. Volume Filter: Uses an EMA of volume (default 20 bars) to confirm that entries occur with sufficient liquidity.
   

Exit Strategies:

• ATR-Based: Dynamic SL adapted to market volatility.
  
• Fixed Percent: Uniform SL% for a more static approach.
  
• Trade Direction: Configure to Long Only, Short Only, or Both.
  
• Risk Reward Ratio: Default is 1.5, but can be adjusted to find the right balance between frequency of winners and total profit.
  

Entry Conditions

• Long Entries: RSI transitions from oversold to above OS threshold, with candle confirming bullish momentum and volume exceeding its EMA baseline.
  
• Short Entries: RSI transitions from overbought to below OB threshold, with candle confirming bearish momentum and volume meeting the same criteria.
  

Exit Conditions

• ATR: Automatically adjusts stop losses and targets based on volatility.
  
• Fixed Percent: Uses a set percentage stop-loss while maintaining a risk/reward ratio to determine the take-profit level.
  

Best Practices Recommended Chart: 5-minute BTCUSDT.P pair for fast-paced scalping opportunities.
Initial Capital: 100 USDT, suggested order size of 20 USDT.
Consider forward-testing and fine-tuning parameters like RSI levels, SL%, and ATR length for different market conditions.
Disabling “Trades On Chart” can help you focus on just buy/sell signals if using as an indicator.

For Developers
The source is open to developers interested in learning about dynamic exits, partial take profits, and integrating multiple filters (RSI + volume). Check the commented code sections and tooltips for guidance and experimentation.

Disclaimer: This strategy is shared for educational purposes only. Past performance does not guarantee future results. Always test and adjust the strategy thoroughly before using it in live markets. The author shares this concept based on personal experience and is not responsible for any financial decisions made by users.