Combining the SuperTrend With the RSI

How to Create a Trend-Following Strategy in Python

Trend following strategies rely on confirmation techniques to detect as early as possible a new trend. This article discusses a strategy on the RSI and the SuperTrend.

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The Relative Strength Index

First introduced by J. Welles Wilder Jr., the RSI is one of the most popular and versatile technical indicators. Mainly used as a contrarian indicator where extreme values signal a reaction that can be exploited. Typically, we use the following steps to calculate the default RSI:

• Calculate the change in the closing prices from the previous ones.
• Separate the positive net changes from the negative net changes.
• Calculate a smoothed moving average on the positive net changes and on the absolute values…