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Number of messages : 49
Points : 1675
Date of Entry : 2016-05-08
Year : 41
Residence Country : India

ma1 Genie RSI Auto Trader

on Fri Mar 20, 2020 11:51 am
Genie RSI Auto Trader is an innovative VertexFX client-side Auto Trader that uses the Relative Strength Index to identify trend reversals.

Relative Strength Index (RSI) is a powerful oscillator to identify the beginning and reversal of trends. The Genie RSI auto trader employs the RSI to identify the end of a trend (trend reversal) to enter in the opposite direction of the current trend. Furthermore, it employs a unique money management technique to determine the lot-size of subsequent positions thereby controlling risk in case of adverse price movements.

In the first step, we use the median price (average of High and Low) to calculate the Relative Strength Index over the user input GPeriod. The median price is used instead of close price to calculate the RSI because it reflects the broad market sentiment.
If the Relative Strength Index is above 80 then a SELL market order is placed, whereas a BUY market order is placed if the RSI is below 20. The initial lot size is set to the specified user input of Lots. When the next position in the same direction is added (while the previous one is open), the new lot size is calculated using the DecreaseFactoruser input. The BUY and SELL orders are tracked independently, but the overall profit or loss of the strategy is used in the calculation of subsequent lot-sizes.

The concept behind the Genie RSI auto trader is that when RSI reaches the extreme levels, namely below 20 and above 80, the price will reverse sooner or later. The intention is to capture this price reversal early on, or otherwise use averaging with conservative money management to achieve profits. By using the DecreaseFactor, the risk of higher losses is reduced in case of adverse price movements. Because trades are added when the previous position is in loss, the probability of closing subsequent trades quickly and profitably is higher.

A trailing stop is employed using the TrailingStop input parameter. The trailing stop is applied to each individual position and not to the aggregated position. This ensures that in case of adverse price movements, subsequent trades are closed quickly at profit, and the auto trader is again ready to re-enter new positions. The TakeProfit input is used to close each position separately when the specified profit target is reached.

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