RSGAlgo

RANGE SUPPORT GRID STRATEGY

Quick Facts:

• Category: Range Trading / Support-Resistance
• Markets: Range-bound markets
• Timeframes: 15min, 1H, 4H

Overview

The RSG Algorithm identifies and trades within established price ranges by detecting support and resistance zones and executing mean-reversion trades when price approaches these levels. The system includes optional grid-based scaling for position building.

The algorithm excels in ranging markets where price oscillates between defined boundaries, capturing profits from predictable reversals.

How It Works

RANGE DETECTION Identify range boundaries:

• Range High: Highest high over lookback period
  • Range Low: Lowest low over lookback period
  • Range validation: Price must respect boundaries N times
  • Range width filter: Minimum/maximum width as ATR ratio

SUPPORT/RESISTANCE ZONES Create zones around boundaries (not exact levels):

• Resistance Zone: Range High ± (ATR × zonePadding)
  • Support Zone: Range Low ± (ATR × zonePadding)
  • Zone approach triggers trade evaluation

ENTRY LOGIC Trade reversals at zone boundaries:

• Long: Price enters support zone + reversal confirmation
  • Short: Price enters resistance zone + reversal confirmation
  • Confirmation: Pin bar, engulfing, or simple close reversal

GRID SCALING (Optional) Build position as price moves deeper into zone:

• Initial entry at zone boundary
  • Additional entries at grid intervals
  • Average entry price improves with scaling

Key Parameters

RANGE DETECTION:

• rangeLookback (50): Period for range detection
  • minRangeTouches (2): Minimum boundary tests for valid range
  • minRangeATR (3.0): Minimum range width as ATR ratio
  • maxRangeATR (10.0): Maximum range width as ATR ratio

ZONES:

• zonePadding (0.2): Zone width as ATR ratio
  • entryConfirmation ("Reversal"): "Touch" or "Reversal"

GRID (Optional):

• useGrid (false): Enable grid scaling
  • gridLevels (3): Number of grid entry levels
  • gridSpacing (0.5): ATR spacing between grid levels

Best Use Cases

✅ RANGE-BOUND MARKETS with defined boundaries ✅ CONSOLIDATION TRADING before breakouts ✅ MEAN REVERSION between support/resistance ✅ GRID TRADING for position averaging