Best Algo Trading Tutorial For The Beginner 5 - RSI index
Algo trading is not as difficult as you think. There are four simple steps to lead you to how to code your own algorithmic trading strategy for the RSI index. All the coding is using pine script and based on the Tradingview platform.
The article will first display the full version of the strategy content at each step and will separate it into steps to explain.
The black part is a default code part, and the yellow part can be changed according to personal needs!
Next, the article will introduce the meaning of each step.
Below is the full version code:
//@version=4
strategy("Yaonology RSI Tutoring", overlay=false, default_qty_type= strategy.percent_of_equity ,default_qty_value=100, currency=currency.USD, initial_capital=10000, commission_type=strategy.commission.percent, commission_value=0)
days = input(title = "Ndays",defval=14)
RSI = rsi(close, days)
plot(RSI, color = color.black)
if(RSI < 20)
strategy.entry(id = "RSI_long",long = true)
if(RSI > 80)
strategy.close(id = "RSI_long")
Step One: Strategy Setting
//@version=4
strategy(“Yaonology RSI Tutoring“, overlay=false, default_qty_type= strategy.percent_of_equity ,default_qty_value=100, currency=currency.USD, initial_capital=10000, commission_type=strategy.commission.percent, commission_value=0)
strategy: Name of strategy (Yaonology sets the name as Yaonology RSI Tutorial)
overlay: No – False
default_qty_type : Type of quantity – percent of equity
default_qty_value : Value of quantity – 100
currency: USD
initial_capital: Initial trading price – 10000
commission_type : Type of commission – percent
commission_value: Value of commission ( there is no commission, so we set 0)
Step Two: Input
Part 1:
days = input(title = “Ndays“,defval=14)
The default length is 14 consecutive trading days.
The parameters can be modified in setting -> input.
Part 2: Use built-in function
RSI = rsi(close, days)
rsi: built-in function in pine script to calculate RSI index
Step Three: Plot
plot(RSI, color = color.black)-color for RSI is set as black
Step Four: Strategy.entry & Strategy.close
if(RSI < 20)
strategy.entry(id = “RSI_long”,long = true)
If this condition applies, this is the point to consider selling it.
Strategy.entry: The command to enter market position;
id: The order name. Yaonology sets as mass
long: This means long position, and here is true
if(RSI > 80)
strategy.close(id = “RSI_long”)
If this condition applies, this is the point to consider selling it.
Strategy.close: The command to close market position
The id should set the same one as the entry one since it is the same order
Complete Version
![[Beginner-5] Best Algo Trading Tutorial- RSI index](https://yaonology.com/wp-content/uploads/2020/03/RSI-1024x360.jpg "[Beginner-5] Best Algo Trading Tutorial- RSI index")
![[Beginner-5] Best Algo Trading Tutorial- RSI index](https://yaonology.com/wp-content/uploads/2020/03/RSI-1-1024x208.jpg "[Beginner-5] Best Algo Trading Tutorial- RSI index")
Net Profit: total net profit by applying the strategy to the historical market
Total Closed Trades: total number of failed trades
Percent profitable: percentage of trades with positive profit
Profit factor: total profit/ total loss
Max Drawdown: total loss by applying the strategy to the historical market (Using S&P 500 as example)
Average Number of Days In Trades: the average number of days between entering and exiting a position by applying the strategy to the historical market
#Algorithmtradingstrategy #codingtutorial #SPY500 #RSIindex
