VWAP EMA RSI Trend Following Strategy

This strategy combines VWAP, EMA and RSI for trend bias and follows trends using a trailing stop approach. It aims to ride trends with adaptive exits. Strategy Logic: 1. Calculate VWAP as fair value benchmark. 2…

Author

ChaoZhang

Complexity

Starter · 46 lines

Parameters

Backtest bar

1d · swing

Tested on

BTC/USDT · futures

This strategy combines VWAP, EMA and RSI for trend bias and follows trends using a trailing stop approach. It aims to ride trends with adaptive exits.

Strategy Logic:

Calculate VWAP as fair value benchmark.
Compute 15-period EMA as intermediate-term trend indicator.
Use RSI to identify overbought levels, RSI above threshold signals bullishness.
Enter long when close exceeds VWAP and EMA, and RSI overbought.
Set trailing stop loss line certain percentage below entry point.
Take fixed profit at set point level to lock in gains.

Advantages:

VWAP, EMA and RSI improve entry accuracy from multiple aspects.
Trailing stop moves dynamically to protect profits.
Fixed profit-taking provides certainty in exiting.

Risks:

RSI and EMA prone to false signals during ranges.
Stop loss calibration requires prudence, too wide or too narrow problematic.
No limit on single trade loss size.

In summary, this strategy combines multiple indicators and uses a trailing stop for trend following. It performs well in sustained trends but requires optimization and risk controls.

Name	Default	What it controls
v_input_int_1	15	EMA Length
v_input_int_2	14	RSI Length
v_input_int_3	45	RSI Overbought Level
v_input_float_1	0.5	Stop Loss %
v_input_float_2	3.5	Take Profit %
v_input_float_3	true	Trailing Stop %

Name

Default

What it controls

v_input_int_1

EMA Length

v_input_int_2

RSI Length

v_input_int_3

RSI Overbought Level

v_input_float_1

0.5

Stop Loss %

v_input_float_2

3.5

Take Profit %

v_input_float_3

true

Trailing Stop %

/*backtest start: 2022-09-12 00:00:00 end: 2023-02-03 00:00:00 period: 1d basePeriod: 1h exchanges: [{"eid":"Futures_Binance","currency":"BTC_USDT"}] */ //@version=5 strategy("VWAP+15EMA with RSI", overlay=true) // Inputs ema_length = input.int(15, title="EMA Length") rsi_length = input.int(14, title="RSI Length") rsi_overbought = input.int(45, title="RSI Overbought Level") stop_loss_pct = input.float(0.5, title="Stop Loss %") take_profit_pct = input.float(3.5, title="Take Profit %") trailing_stop_pct = input.float(1, title="Trailing Stop %") // Calculate Indicators vwap = ta.vwap(hlc3) ema = ta.ema(close, ema_length) rsi = ta.rsi(close, rsi_length) // Entry Condition long_entry = close > vwap and close > ema and rsi > rsi_overbought // Exit Conditions stop_loss = strategy.position_avg_price * (1 - stop_loss_pct / 100) take_profit = strategy.position_avg_price * (1 + take_profit_pct / 100) trailing_stop = strategy.position_avg_price * (1 - trailing_stop_pct / 100) // Submit Orders if long_entry and strategy.position_size == 0 strategy.entry("Long", strategy.long) if strategy.position_size > 0 strategy.exit("Stop Loss /Profit", "Long", profit = take_profit, stop=stop_loss, trail_offset = trailing_stop) // Plot Indicators plot(vwap, title="VWAP", color=color.blue) plot(ema, title="EMA", color=color.orange) plot(rsi, title="RSI", color=color.purple) hline(rsi_overbought, title="RSI Overbought", color=color.red)

VWAP EMA RSI Trend Following Strategy

Parameters

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