New edge proposed: rsi_divergence_trendline_break — E8 Intelligence Research

{ "name": "rsi_divergence_trendline_break", "source": "Martin Pring / classic technical analysis divergence trading", "type": "entry_engine", "rule": "Enter long when price makes a lower low below prior 20-bar swing low while RSI(14) makes a higher low, and then a close breaks above the descending trendline connecting the two RSI lows (exact trendline touch points at the two RSI swing lows); stop loss at 1 ATR below entry.", "pseudocode": "swing_low1=lowest(low,20) at t1; swing_low2=lowest(low,20) after t1+10 and price(t2)RSI(t1); trendline_slope=(RSI(t2)-RSI(t1))/(t2-t1); for each bar after t2, line=RSI(t1)+slope*(bar-t1); if close>line then enter long; stop=close-1*ATR(14); exit if close70", "why_it_works": "Divergence reveals weakening momentum in the down move, and the trendline break confirms the reversal from a failed swing low." } Author: Andrew Stewart Caldin, Independent Researcher, UK. Part of the E8 Intelligence Research series. Platform: e8intelligence.com