Improved Options Confluence RSI Filter Backtest Strategy by nitinarora2004
By nitinarora2004
Performance Metrics
- Author: nitinarora2004
- Symbol: NSE:BANKNIFTY
- Timeframe: 5 minutes
- Win Rate: 33.8%
- Profit Factor: 1.526
Description
Best Settings EMA -9Chandlier Exit -10Multiplier -3Bos look back 1For call entries RSI must be above -47For put entries RSI must be below - 35RSI Mid zone low 35RSI Mid Zone High 47Options Confluence + RSI Filter — Backtest StrategyA multi-factor confluence strategy designed for intraday options trading (CALL/PUT), combining trend, momentum, and volatility-exhaustion filters to reduce false signals during sideways/choppy price action.Core LogicThe strategy only enters a trade when all of the following align:EMA (13) — price must be trading above/below the EMA in the direction of the tradeVWAP — price must also be above/below VWAP, confirming intraday value-area biasChandelier Exit — an ATR-based trend/volatility filter must confirm the same directional biasBreak of Structure (BOS) — price must break the recent swing high/low over a configurable lookback, confirming momentumRSI Filter (added to reduce sideways whipsaws)Three additional RSI-based conditions are layered on top of the core confluence:Mid-zone block — entries are disabled entirely when RSI sits between 45-55, since this range is typically a sign of indecisive, range-bound price action with no real momentum.Directional confirmation — CALL entries require RSI above 55; PUT entries require RSI below 45, ensuring momentum genuinely supports the trade direction.Overbought/Oversold block — CALL entries are disabled when RSI is above 70 (overbought), and PUT entries are disabled when RSI is below 30 (oversold), avoiding entries into an already-extended move that's prone to mean-reversion.Effectively, this narrows valid entries to two RSI bands: CALLs only between RSI 55-70, and PUTs only between RSI 30-45.Exit LogicPositions are closed when price crosses back below/above the EMA, or when the Chandelier Exit flips direction — whichever comes first.Visual AidsEMA and VWAP plotted on the price chartBackground highlighting for RSI mid-zone (sideways), overbought, and oversold conditions, so you can visually see why a trade was or wasn't takenCALL/PUT/EXIT labels marked directly on the chartInputs (fully adjustable)EMA length, Chandelier ATR period & multiplier, BOS lookback, RSI length, RSI bull/bear confirmation levels, RSI mid-zone bounds, RSI overbought/oversold levels — every filter can be toggled or tuned to fit different instruments and timeframes.Intended UseBuilt and tested on 5-minute index charts (e.g. Bank Nifty) for options directional trading. Best used as a decision-support tool alongside price action and option-chain context, not as a fully automated signal generator. As with any strategy, backtest thoroughly on your instrument and timeframe before live use, and note that past performance does not guarantee future results.