This is the scripted implementation of the The Secret Mindset (TSM) channel's
RSI + ADX + EMA strategy that was described in their video titled
Scalping Trading Was Impossible, Until I Found How To Combine EMA RSI ADX Indicators (FULL Strategy).
The video is available at https://www.youtube.com/watch?v=vBM0imYSzxI.
The script can be used to backtest the strategy, and also to set alerts for automated trading purposes.
Indicators used in this strategy:
The default settings for each indicator is as per the instructions in the video.
Please see the video at 07:59 for a long trade example.
At 11:14 you are told to only enter a position if the candle following the entry signal candle "takes out" the high of the signal candle.
The way this can be accomplished with the strategy script is to use a
stop entry order with the with the entry price set to the high of the entry signal candle:
Notice also how the
Order Fill Max. Wait (Bars) is set to
1. This is done so that the strategy only waits a single bar following the entry signal candle to fill the order before cancelling it and looking for new entries.
As told in the video, the stop loss has to go below (i.e. set to the
low) of the entry signal candle.
The way this can be achieved in the script is to use the
Wick based stop loss strategy:
Wick based stop loss strategy sets the stop loss to the low of the entry signal candle. You also have the option to offset the calculated price, by configuring a
Stop Loss Wick Price Offset.
The video suggests to use a risk to reward ratio of 1:1 or 1.5:1 for the take profit.
This can be achieved by using the
Risk multiplier take profit strategy, with the
risk multiplier set to 1.5:
Please see the video at 09:04 for a short trade example.
The same criteria applies to short trades as well, meaning that a position will only be entered if the low of the entry signal candle is "taken out" on the following candle (please see above for more explanation).
The same logic applies here as for the long trades; the only difference is that the stop loss has to go above (i.e. set to the
high) of the entry signal candle.
The same rule applies here, use a 1:1 or 1.5:1 risk reward ratio for the take profit.