RSI Reversal & MACD Confirmation
Two indicator-driven playbooks: RSI extremes with trend filters, and MACD crosses as confirmation — never as lone oracles.
Mean Reversion & SwingAdvanced 7 min read· Lesson 9 of 9 in Trading Strategies
Overview
Indicators are evidence, not commands. RSI Reversal: buy RSI<30 ONLY where mean reversion is plausible (uptrend pullback or ranging regime); the naked version bleeds in downtrends. MACD Confirmation: use the signal-line cross to CONFIRM a setup found by structure (support bounce, base break) — a second witness, not the case itself.
Market conditions
RSI reversal: uptrends/ranges. MACD confirmation: anywhere structure gives a primary signal.
Entry rules
RSI: RSI14 < 30 AND EMA50 > EMA200 (the dip-buy preset). MACD: your structural entry PLUS MACD_BULL_CROSS agreeing within a few bars.
Exit rules
RSI: RSI > 60 or the prior high. MACD: structure-based exit, or the reverse cross for laggards.
Stop loss
RSI: below the pullback low (~5%). MACD: below the structure that triggered the trade.
Position sizing
Standard 0.5–1% fixed-fractional throughout.
Risk management
The universal indicator sin: stacking three momentum oscillators that all say the same thing and calling it 'confirmation.' Correlated evidence is one witness with three hats.
Evidence & backtesting
Both presets ship with the platform — run each against buy-and-hold on several symbols. The RSI dip-buy tends to shine on choppy grinders and lag pure trenders; seeing where each fails is the actual education. Every strategy here maps to this platform's Backtest panel — the matching Strategy Preset fills entry/exit/stops in one click, and every result is benchmarked against buy-and-hold, which most simple strategies LOSE to on strong trenders. Seeing that honestly is the lesson.