The Linear Regression with Rsioma Forex Strategy is a method of predicting trend reversals in the market, relying on just two indicators yet boasting high accuracy. The Rsioma indicator operates by considering two moving averages, computing their Relative Strength Index (RSI), and further incorporating a moving average of this calculated RSI. These resultant lines effectively indicate shifts in trends, visible in a separate display window ranging from 0 to 100. Concurrently, linear regression utilizes past price series to forecast future market trends.
The strategy's objective is to enter the market at points where the price intersects the overbought and oversold regions of the regression line, typically marked by the price touching or breaching the channel's boundaries, followed by a crossing of the RSIOM in the opposite direction.
The setup for this strategy is adaptable across various trading platforms owing to the consistent availability of the two required indicators. It's recommended to use a time frame of at least 15 minutes, applicable to all currency pairs. Notably, when employed on a daily time frame, this strategy exhibits a profitability rate exceeding 80%.
Key Indicators Setup
Search for indicators in TradingView > Indicators > Community Scripts > write in search (indicators name).
Linear Regression default length: 100 periods.
Rsioma default settings. However, on higher time frames, adjusting Rsioma to lower values (e.g., 11 periods) may be beneficial.
Optional: Heikin Ashi.
Trading Rules:
Buy
Enter when the price touches or surpasses the lower channel of the regression line.
Subsequently, await the Rsioma to exhibit an upward crossover.
Sell
Enter when the price touches or exceeds the upper channel of the regression line.
Await the Rsioma to undergo a downward crossover.
Exit Strategy
Exit the position upon a contrary crossover of the Rsioma.
Alternatively, exit when the price reaches the midpoint of the channel, or maintain a stop-loss ratio of 1:1.25.
Place the stop-loss order at the preceding swing high/low.
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