Understanding the RSI crossover indicator
The RSI indicator is part of any trader’s basic toolbox. It helps you understand the strength of a trend over a given period.
The RSI crossover indicator, on the other hand, allows you to calculate two RSIs calculated in the same way, but over different periods, in order to understand whether the strength of the trend being followed is increasing or decreasing.
RSI crossover block configuration
On BullTrading, you can configure each block to make it unique. In this block, you can define the time unit, the period used, …
Time Unit
As Bulltrading has the ability to create a multi-timeframe strategy, you have the option of choosing which time period to calculate this indicator on. There are two possibilities:
- Default: if you leave Default, the time unit will vary according to the time horizon you use in the backtest.
- 15m,30m,1d… : If you choose a specific time unit in the time unit, this means that you will choose this specific time unit whatever time unit you use to backtest your strategy.
TIP: If you’re a beginner, I advise you to leave the default time unit.
Period Slow RSI & Period Fast RSI
This indicator is based on the intersection of two RSIs at different periods, and it is here that we define the periods in question. “Period Slow Rsi” is the parameter that defines the longer period and ‘Period Fast Rsi’ is the parameter that defines the shorter period.
Signal Type
This parameter has only two possibilities: CrossOver and Position. Let’s explain the difference this parameter makes:
- CrossOver: if you choose CrossOver for the signal type, this block will be enabled only when the RSI period fast line passes below or above the RSI period slow line.
- Position: with this option, the block will be validated as long as you are in the chosen trigger type (Bearish or Bullish).
TIPS: the CrossOver parameter is much more restrictive, so it’s worth using it when you only have one or two indicators combined. However, if you have too many blocks combined with the Crossover parameter, this will greatly reduce the number of trades in your strategy, as we need, for example, a crossover between the two MAs + a crossover between the RSI 70 threshold + a crossover in the Vortex indicator…
So, when combining several indicator blocks, don’t set more than 1 or 2 blocks with the CrossOvers parameter if you’re a beginner.
Trigger Type
This parameter has only two possibilities: Bullish or Bearish. Let’s explain the difference:
- Bullish: if you set the trigger type to bullish, the block is validated if the RSI fast period line is above the RSI slow period line.
- Bearish: if you define the trigger type as bearish, the block is validated if the RSI fast period line is below the RSI slow period line.
