Understanding RSI Signals
The basic idea behind using the RSI is to identify overbought and oversold conditions based on RSI levels. Typically, an RSI above 70 suggests the uptrend is overextended, while an RSI below 30 may indicate excessive selling pressure.
In theory, you would sell when the RSI moves above 70 and buy when it drops below 30. The rules sound simple, but they don’t translate directly into an effective trading strategy. The RSI can remain above 70—or below 30—for long periods, offering no clear signal on the exact moment to buy or sell. In practice, following the rule mechanically could easily result in missing significant profit, sometimes as much as 20%.
Improving Timing with Multi-Timeframe Signals
To refine the timing, start by marking the periods where the RSI is above 70 or below 30 on a higher time frame, such as the daily chart. This gives you the broader context.
Next, add a moving average to pinpoint the optimal moment to enter or exit a trade. When the price drops below the moving average, it signals that momentum is weakening; when the price rises above it, momentum is strengthening. In this example, an MA100 works well because it tends to provide reliable signals.
Coinrule makes this approach more powerful by allowing you to combine multiple time frames inside a single strategy. Once you identify the exact buy or sell points using the moving average, zoom back out to the higher time frame to confirm what the RSI was doing at that moment. This same pattern appears clearly on Bitcoin as well: the setup would have captured the two major trend reversals of the past four months.
Building and Testing the Strategy on Coinrule
Coinrule allows you to define multiple layered conditions to create an effective multi-timeframe setup. Keep in mind that more restrictive conditions mean fewer trades but generally higher accuracy. Looser conditions create more opportunities but may result in less consistent performance.
The best way to find your balance is to test your ideas on the Demo Exchange. Experiment with different RSI levels, time frames, and moving averages until you discover the setup that aligns with your goals.
Coinrule is essentially the “if-this-then-that” of crypto trading, letting you plan your strategies in advance instead of spending hours watching charts. And because no coding is required, anyone can build automated strategies with ease.
https://www.youtube.com/watch?v=F1TfHCBVwbA
Download Coinrule, the Crypto trading bot on IOS, and on the Google Store.