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This article mainly explains the method of the combination of moving average and RSI. The content of the explanation is simple and clear, and it is easy to learn and understand. Please follow the editor's train of thought to study and learn the method of the combination of moving average and RSI.

The combined Application of moving average and RSI

With regard to moving average strategy, in previous articles, it has been mentioned many times and there are many actual combat strategies for readers to choose from. Moving average strategy has been valued by many CTA strategy enthusiasts because of its great advantage in trend tracking, but for the market, it is still mostly volatile most of the time, so it is necessary to add some indicators for shock judgment combined with trend strategy to use. This will not only increase potential profitability, but also be of great benefit to money management. So that the utilization rate and security of funds have been greatly improved.

In this article, we will introduce one of the most popular oscillators: relative strength Index (RSI). You may have read some general articles about RSI; however, in this article, I will introduce a trading strategy that can be used in trading that can be deployed in conjunction with the moving average strategy on the inventor's quantitative platform.

The principle and Application of RSI Index

Before we delve into the strategy, let's take a look at the RSI metrics and give you some basic introductions.

The relative strength Index (RSI) is one of the most popular indicators in the market.

RSI is a basic index to measure the performance of a trading target by comparing the strength of rising days with falling days. The number is calculated and ranges from 0 to 100. Readings above 70 are considered bullish, while readings below 30 are bearish.

Relative strength index formula

RSI was developed by J.Welles Wilder and detailed in his book "New Concepts of Technology Trading system" in June 1978. For all hardcore technical analysts, the following is an example of the relative intensity index formula.

The default setting for RSI is 14 days, so you can calculate according to the following formula:

Relative intensity = 1.25 (average increase of past 13 K lines) + 0.25 (current increase) / (0.75 (average decline of past 13 K lines) + 0 (current decline))

Relative strength = 1.50 / 0.75 = 2

RSI = 100-[100 / (1x 2)] = 66.67

Now that we know the relative intensity index formula, let's analyze how to use this powerful indicator.

Most traders using the relative strength index only need to buy the target when the index reaches 30 and sell when it reaches 70, but if you do so, you will lose money by buying or selling according to this rule. The market doesn't reward anyone for the obvious. This does not mean that the simple method does not work, but the simple method that everyone follows has lower odds. So as mentioned at the beginning, we need to introduce moving averages to assist in judgment.

Writing and applying the strategy of moving average plus RSI on the inventor's quantitative platform

Write it down, we will deploy this strategy to the inventor quantification platform, and we will choose the easy-to-understand my language for programming.

Strategy name: EMA and RSI relative strength index combination strategy

Cycle: 15 minutes, 30 minutes, etc.

Support: commodity futures, digital currency

Main picture:

MA1, formula: MA1 ^ EMA (C, N1); MA2, formula: MA2 ^ EMA (C, N2)

Secondary picture:

RSI, formula:RSIVALUE:SMA (MAX (CLOSE-REF (CLOSE,1), 0), LENGTH,1) / SMA (ABS (CLOSE-REF (CLOSE,1)), LENGTH,1) * 100

Source code:

LENGTH:=9;OVERBOUGHT:=70;OVERSOLD:=100-OVERBOUGHT;RSIVALUE:SMA (MAX (CLOSE-REF (CLOSE,1), 0) / SMA (ABS (CLOSE-REF (CLOSE,1)), LENGTH,1) * 100 * BUYKOL0 AND BARPOS > N2 AND MA1 > MA2 AND C > MAX (MA1,MA2) AND CROSSUP (RSIVALUE,OVERBOUGHT); SELLK:=SKVOL=0 AND BARPOS > N2 AND MA1

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