The strategy outlined focuses on generating investment returns using the Relative Strength Index (RSI). It seeks to identify overbought and oversold conditions by monitoring RSI values. For overbought conditions, an RSI above 70 triggers alerts for potential sell opportunities, with a comprehensive analysis of past performance to guide decisions. A similar approach is taken for oversold conditions, where an RSI below 30 indicates potential buy opportunities. Backtesting and comparing RSI with other technical indicators help refine these strategies and manage risks effectively.
Additionally, the strategy incorporates a divergence approach by identifying bullish and bearish divergences. Alerts are set for divergences, informing buy and sell decisions. Historical performance and integration with other indicators enhance the understanding of divergence effects on asset prices. The strategy emphasizes documentation and continual improvement through findings and outcome analysis.
The strategies
⛳️ Strategy 1: Identify overbought conditions
- Monitor RSI for values above 70
- Set up alerts to notify when RSI exceeds 70
- Analyse historical performance when RSI is above 70
- Evaluate potential selling opportunities in overbought conditions
- Backtest strategy using historical RSI data
- Compare RSI indicator against other technical indicators
- Determine asset-specific RSI levels for overbought conditions
- Use RSI trends to predict reversals in price
- Create a risk management plan for overbought scenarios
- Document all findings and adjust strategy as necessary
⛳️ Strategy 2: Identify oversold conditions
- Monitor RSI for values below 30
- Set up alerts to notify when RSI drops below 30
- Analyse historical performance when RSI is below 30
- Evaluate potential buying opportunities in oversold conditions
- Backtest strategy using historical RSI data
- Compare RSI indicator against other technical indicators
- Determine asset-specific RSI levels for oversold conditions
- Use RSI trends to predict reversals in price
- Create a risk management plan for oversold scenarios
- Document all findings and adjust strategy as necessary
⛳️ Strategy 3: Implement a divergence strategy
- Learn to identify bullish and bearish divergences
- Monitor asset prices relative to RSI trends
- Set alerts for potential divergence conditions
- Use divergence signals to inform buy and sell decisions
- Analyse historical performance of divergence signals
- Integrate divergence analysis with other technical indicators
- Backtest divergence strategy using past data
- Develop criteria for validating divergence signals
- Create a risk management plan for divergence trading
- Continuously improve strategy based on observed outcomes
Bringing accountability to your strategy
It's one thing to have a plan, it's another to stick to it. We hope that the examples above will help you get started with your own strategy, but we also know that it's easy to get lost in the day-to-day effort.
That's why we built Tability: to help you track your progress, keep your team aligned, and make sure you're always moving in the right direction.
Give it a try and see how it can help you bring accountability to your strategy.
