BTC Momentum Strategy - RSI & Stoch RSI Entry and EMA Exit

BTC Momentum Strategy: RSI & Stoch RSI Entry with EMA Exit

This strategy is designed to identify potentially strong entry points for Bitcoin (BTC) during periods of shifting momentum and then ride the trend until it shows signs of weakness. It's a straightforward, long-only strategy, meaning it only looks for opportunities to buy and then sell for a profit.

How It Works:

The strategy combines a few classic indicators to make its decisions. Think of it as a two-step confirmation system for buying, with a simple rule for selling.

1. The Buy Signal (Green Triangle)

To generate a buy signal, the strategy looks for two things to happen at the same time:

• RSI Confirmation: It first waits for the Relative Strength Index (RSI) to show signs of bullish momentum. Specifically, it's looking for the RSI line to cross above its own moving average, suggesting that strength is starting to build from a lower level. This helps catch moves as they begin to turn positive.
  
• Stochastic RSI Confirmation: As an extra layer of confirmation, it also checks the Stochastic RSI. This helps filter out weaker signals and confirm that momentum is truly shifting upwards from an oversold or "bottomed-out" condition.
  

When both of these conditions are met, a green "buy" triangle will appear below the candle, and the strategy will enter a long position.

2. The Sell Signal (Red Triangle)

The exit rule is simple and designed to let your winners run while protecting you when the trend reverses.

• * EMA-Based Exit: The strategy plots an orange line on your chart, which is an Exponential Moving Average (EMA). The strategy will hold the position as long as the price stays above this line. If a candle closes *below* the orange EMA line, it's taken as a sign that the short-term trend is weakening, and the strategy will close the position to lock in profits or cut losses. A red "sell" triangle will appear above that candle.
  

Best Use:

This strategy was built with Bitcoin in mind and tends to perform best on higher timeframes like the Weekly charts. It aims to capture major swings rather than small, quick scalps.

You can adjust all the settings for the RSI, Stochastic RSI, and the Exit EMA to fine-tune the strategy to your own trading style.