Adaptive RSI Trade

Entry Logic

• Exact Entry Trigger: Use an RSI with a period that adapts to market cycle length. Enter long on a cross up from oversold (e.g., 30) and short on a cross down from overbought (e.g., 70).
• Confirmation: A candle close in the direction of the trade.
• Timeframe: Any.
• Market Condition: Varies, as the indicator adapts.

Exit Logic

• Profit Targets: Target the opposite RSI level (70 for longs, 30 for shorts).

Stop Loss Structure

• Hard Stop: Place stop below the recent swing low.

Risk Management Framework

• Risk Per Trade: 1% of account capital.

Position Sizing Model

• Sizing Approach: Fixed fractional.

Trade Filtering

• Market Conditions to Avoid: The indicator should adapt, but avoid extremely low volatility.

Context Framework

• Trend Direction: Take signals in the direction of a longer-term trend.

Trade Management Rules

• Breakeven: Move stop to breakeven after a 1R move.

Time Rules

• Optimal Window: Any.

Setup Classification

• A+ Setup: An adaptive RSI signal that aligns with a key support/resistance level.

Market Selection Criteria

• Instruments: Any.

Statistical Edge Metrics

• Win Rate: 55-65%.
• Profit Factor: 1.7.
• Expectancy: 0.35R.

Failure Conditions

• Strategy Fails: During sudden market regime changes.

Psychological Rules

• Discipline: Trust the adaptive nature of the indicator.

Advanced Components

• Implementation: Requires custom coding (e.g., using Ehlers_ methods for cycle measurement)._

Location

• Strongest: In markets with clear, cyclical behavior.