RSI & ROC Momentum Strategy: 1% SL/3% TP Pine Script Code

Momentum Oscillator Strategy [algo_aakash] | Full Code Inside

A momentum oscillator strategy helps traders identify trend strength and potential reversals. This Pine Script implementation combines two momentum indicators with clear entry/exit rules, offering a systematic approach to capture trending markets while managing risk through stop losses and take profits.

Strategy Components and Design Logic

This strategy uses the Relative Strength Index (RSI) and Rate of Change (ROC) to gauge momentum. RSI measures the speed of price changes while ROC tracks percentage price movement over a specified period. Key parameters include:

• RSI Period: 14-bar calculation window
• ROC Period: 12-bar momentum measurement
• 1% stop loss and 3% take profit levels

Long entries trigger when RSI crosses above 50 (bullish momentum) with positive ROC. Short entries activate when RSI drops below 50 amid negative ROC.

Execution and Risk Management

The system employs conservative position sizing at 100% equity allocation per trade.Stop losses protect against sudden reversals while take profits secure gains at predetermined levels.Exit conditions include:

• Automatic closure at 1% loss from entry price
• Profit-taking at 3% gains
• Counter-signal reversals (RSI crossing opposite threshold)

This momentum-based approach excels in trending markets but requires confirmation through backtesting across multiple instruments. Traders should adjust period parameters and risk levels based on volatility profiles. The included stop-loss mechanism helps preserve capital during false breakouts.

// Author: algo_aakash
//@version=5
strategy("Momentum Oscillator Strategy [algo_aakash] | Full Code Inside", 
  overlay=true, 
  default_qty_type=strategy.percent_of_equity, 
  default_qty_value=100,
  commission_type=strategy.commission.percent, 
  commission_value=0.1)

// Indicator Inputs
rsiPeriod = input(14, "RSI Period")
rocPeriod = input(12, "ROC Period")
sl = input(1.0, "Stop Loss %") / 100
tp = input(3.0, "Take Profit %") / 100

// Momentum Calculations
rsi = ta.rsi(close, rsiPeriod)
roc = ta.roc(close, rocPeriod)

// Entry Conditions
longCondition = ta.crossover(rsi, 50) and roc > 0
shortCondition = ta.crossunder(rsi, 50) and roc < 0

// Execution Logic
if (longCondition)
    strategy.entry("Long", strategy.long)
    strategy.exit("XL", "Long", stop=close*(1-sl), limit=close*(1+tp))
    
if (shortCondition)
    strategy.entry("Short", strategy.short)
    strategy.exit("XS", "Short", stop=close*(1+sl), limit=close*(1-tp))