Trading Strategies Revealed – “RSI & Awesome Oscillator” review

Trend reversal trading strategy “RSI & Awesome Oscillator” is designed mainly for Forex and can be used on all currency pairs on any time-frame. Its rules state that:

A trader should place a buy order when RSI is below 30 and Awesome Oscillator shows a green bar. A sell order should be placed when RSI is above 70 and Awesome Oscillator shows a red bar.
You can find more about the Awesome Oscillator + RSI here.

For our test, we have used a Trailing Stop in 30 Pips which is launched after a trade has started and is modified each new 1 pip of profit. From our point of view, such approach allows to maximize profit and minimize drawdown. We have run the test for 2010.01.01-2018.12.31 using Control Points modelling on EURGBP-H1, with 1:1 leverage, without reinvestment, assuming spread equals 10 ticks, with starting balance $10,000. These are the main parameters of financial performance, that may allow you to evaluate whether this strategy worth your attention or not:

ROI# of tradesWinning ratioMax. drawdown

The following charts may give some possible insights on which filters to apply (time sessions, day of week limitation, trend strength threshold, overbought/oversold conditions, volatility range) to turn this strategy profitable should you decide to use this strategy in your investment portfolio:

Analysis Insights

1. “RSI & Awesome Oscillator” trading strategy has produced 0.65% annualized ROI during 2010–2018 years using 1:1 leverage. Maximum drawdown was 24.70%.

2. Trades that were opened at a higher value of distance between upper and lower Bollinger Bands brought more profit, when trading “RSI & Awesome Oscillator” trading strategy during 2010–2018. Large distance between bands indicates high volatility of the market which allows the trade to get more profit. Usage of this filter allows to reduce the drawdown from 24.70% to 13.41% using leverage 1:1.

3. Trades that were opened at a lower value of Gator Oscillator brought more losses, when trading “RSI & Awesome Oscillator” trading strategy during 2010–2018. Lower value of Gator Oscillator indicates that the marker is in flat what prevents the trade to get into profit. Using this filter allows to increase ROI form 6.5% to 29.5% using leverage 1:1.

4. We have analyzed data received from a test of “RSI & Awesome Oscillator” trading strategy during 2010–2018 years and applied some filters such as Gator Oscillator, Bears & Bulls, ADX and Bollinger Bands. As a result, the profitability of the strategy has increased from 6.55% up to 74.89% and its drawdown has reduced from 24.70% to 6.03% using leverage 1:1. Reducing the drawdown has allowed us to increase the leverage up to 1:17, which in turn, has resulted in annualized ROI increase up to 110.55%!

If you decide to buy an EA, coded in accordance with the strategy and used for the test, or to make any amendments to the original strategy rules – please, feel free to contact us.

Our company specializes on automated trading systems and trading indicators development for the most popular trading platforms, such as MetaTrader 4/5, NinjaTrader 7/8 and cTrader.

If you need your own automated trading software designed based on your individual requirements, make a request for a free consultation with our team of professional programmers and find out the cost and terms of your project development.