Momentum & Trend Alignment Strategy
This strategy combines two powerful technical indicators — Supertrend and Relative Strength Index (RSI) — to create a hybrid entry model that filters trades by both trend direction and momentum strength. The goal is to only participate in trades that align with the prevailing trend and have momentum confirmation.
Indicator Breakdown:
Supertrend Indicator:
Built on ATR-based trailing stop logic, Supertrend defines whether the current market condition is in an uptrend or downtrend using:
ATR Length (default: 14)
Multiplier (default: 7.0)
RSI (Relative Strength Index):
Measures momentum and overbought/oversold zones with a configurable length (default: 14).
Overbought threshold = 70
Oversold threshold = 30
Entry Logic:
Long Entry:
Triggered when:
Supertrend indicates an uptrend (direction == 1)
RSI is above the overbought level (indicating strong bullish momentum)
Short Entry:
Triggered when: Supertrend signals a downtrend (direction == -1) RSI is below the oversold level (indicating strong bearish momentum) This means the strategy enters only when both trend and momentum agree.
Visual Features:
Supertrend line plotted directly on the chart, changing color: Green in uptrends Red in downtrends No unnecessary chart clutter — clean and focused
Suggested Timeframes:
Most effective on 1h, 4h, and daily charts. Can be backtested across various assets including crypto, forex, and stocks.
Final Notes:
This strategy helps avoid counter-trend traps by requiring directional agreement between a trend indicator (Supertrend) and a momentum oscillator (RSI). However, in highly choppy markets, filters may delay signals. Always test across different assets. Note: Different assets may require specific parameter adjustments. Users are responsible for optimizing the strategy settings for the asset they trade. Please ensure you fine-tune the parameters according to your trading pair.
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