RSI and Moving Average Combination MT5 Martingale Scalping Strategy

Overview

The strategy is named “RSI and Moving Average Combination MT5 Martingale Scalping Strategy”. It combines the double moving average indicator and the Relative Strength Index (RSI) indicator to implement high-frequency scalping trading, while incorporating the Martingale position averaging principle to control the overall risk level of the strategy.

Strategy Logic

1. The strategy first uses the stoch indicator to draw a custom oscillator with the parameter oscillatorPeriod set to 5, and sets upper and lower thresholds k1 and k2 to build the consolidation area. When the stochastic indicator value enters the consolidation area, it indicates that there may be reversal opportunities.

2. Next, the RSI indicator is incorporated to identify overbought and oversold phenomena. The RSI indicator can effectively identify the timing of market penetration of upper and lower limits. This strategy sets the overbought line of RSI at 70 and the oversold line at 30.

3. In addition, the strategy also introduces the trendActivity factor as the main trend filter. When the stochastic indicator and RSI meet the reversal conditions at the same time, it also checks whether the main trend is still active enough to avoid losses due to false breakouts in the shock market.

4. Finally, the strategy uses the classic Martingale position averaging principle to control overall risk. By dynamically adjusting the trading volume, additional positions are placed when the initial position is at a loss in order to achieve breakeven and thereby control maximum drawdown.

Advantage Analysis

1. The incorporation of the RSI indicator can effectively identify overbought and oversold phenomena to assist in judging reversal timing.

2. Setting the oscillator to determine the consolidation area can filter out some false breakout signals.

3. Setting the main trend filter avoids losses in volatile markets.

4. Martingale position averaging effectively controls the maximum drawdown of the strategy and is key to sustainable profitability.

Risk Analysis

1. Under abnormal market conditions, the RSI indicator may fail and cause misjudgment of overbought and oversold conditions. This risk should be especially noted.

2. Improper parameter settings of the oscillator may also lead to excessive signal filtering or identification of false breakouts. This requires parameter optimization based on historical market data.

3. Martingale position averaging will lead to cascading losses under certain environments. If the number of additional lots is too large, it will pose a major risk of account depletion.

4. The strategy has only been verified on 15-minute GBPUSD currency pair data. There may be data fitting risks in other markets and other periods.

Optimization Directions

1. Optimize the parameters of the RSI to find parameters more suitable for the current market environment.

2. Test and optimize the parameters of the oscillator so that it can judge the consolidation area more accurately.

3. Add stop loss logic. Actively stop losses when losses reach a certain level to effectively control single losses.

4. Optimize the setting rules of the main trend filter to prevent missing reversal opportunities.

5. Test different additional position sizing settings. Need to ensure that the additional amount is not too large to cause rapid loss.

Summary

This strategy combines the double moving average indicator, RSI indicator and custom oscillator to judge the upper and lower limit breakthrough phenomena in the short term, and uses the main trend filter to avoid false breakouts for efficient scalping trading. At the same time, the classic Martingale position averaging principle is introduced to control the overall risk level. The strategy has the potential to generate stable returns after parameter optimization and rigorous risk management.