RSI strategy on Deriv: what the RSI bots wait for

RSI, the Relative Strength Index, scores how one-sided the recent ticks have been, on a scale from 0 to 100. A market that has mostly been ticking up scores high, one that has mostly been ticking down scores low, and an even mix sits near 50. The usual levels are 70, called overbought, and 30, called oversold. An RSI strategy on Deriv waits for RSI to pass a level you set and then buys a contract. BinaryTick has free bots that read RSI on seven different contract types, with every level on the card before you press Run bot.

How RSI is worked out

RSI compares the size of the recent up moves with the size of the recent down moves. Most bots use a period of 14 ticks. To start, that means the last 14 moves.

These are 14 moves in a row on Volatility 100, read from Deriv:

-0.06, +0.04, +0.11, -0.20, +0.19, +0.12, +0.04, -0.18, -0.04, +0.06, +0.03, -0.05, -0.13, +0.02

1. Add up the gains. The up moves come to 0.61. Spread over 14 ticks, that is an average gain of 0.0436 per tick.
2. Add up the losses. The down moves come to 0.66, an average loss of 0.0471 per tick.
3. Divide one by the other. 0.61 ÷ 0.66 = 0.92. This is the relative strength. Above 1, the ups have been bigger; below 1, the downs have.
4. Turn it into a score. RSI = 100 − 100 ÷ (1 + 0.92) = 48.

The ups and downs nearly balanced out, so RSI landed just under the middle. Had every move been up, it would have read 100.

From then on, each new tick updates the two averages instead of starting again: the new average is 13 parts the old average and 1 part the newest move. A single big tick moves RSI, but it does not throw away the ticks before it. This is the standard way of calculating RSI, and it is what the Relative Strength Index block in Deriv's Bot Builder does. The BinaryTick bots use that same block.

What 70 and 30 mean on tick data

An RSI above 70 says the recent ticks have pushed up hard. Below 30, they have pushed down hard. Readings out there are uncommon. Over 950 ticks on Volatility 100, a 14-tick RSI was above 70 or below 30 on 87 of them, about one tick in eleven.

The RSI period changes that a lot. With the same ticks:

A shorter period reacts to fewer ticks, so it swings to the edges more often. A longer one moves slowly and rarely gets there. That is the main reason an RSI bot trades often or waits a long time between trades.

RSI describes the ticks that have already happened. Each bot below decides what to do with that reading, and they read it in two different ways: at the edges, as a sign the push has gone far, or at the midline, 50, as a sign of which side is in control.

The RSI bots on BinaryTick

Every bot below is free, explains its rule under How it works on its card, and lists every number it uses under Settings.

Bots that trade against an extreme. These buy the opposite direction once RSI reaches an edge.

• RSI Reversal is a Rise / Fall bot on Volatility 10 (1s). It buys Rise when the 14-tick RSI falls below 30 and Fall when it rises above 70, on a 5 tick contract. It trades often.
• RSI Extreme Sniper is a Rise / Fall bot on Volatility 100 with wider levels, 25 and 75. It also needs a 30-tick moving average to agree: it buys Rise only when RSI is at 25 or below and the price sits below that average, and Fall only when RSI is at 75 or above and the price sits above it. Both together are rare, so it can watch for a long time.
• Run Reversal trades Only Ups / Only Downs, a contract that pays only if every tick moves the same way. Above 72 it buys Only Downs, and below 28 Only Ups, on a 2 tick contract.
• Reset Fade trades Reset Call / Reset Put. Above 68 it buys Reset Put, below 32 Reset Call. If the contract is losing halfway through, Deriv moves the barrier to the price at that point, which helps when the turn comes late.

Bots that trade with the push. These read a one-sided run as a sign it will carry on for a few more ticks.

• RSI Tick Pick trades High / Low Ticks, where you name which of the next 5 ticks will be the highest or the lowest. Its levels are 60 and 40, closer to the middle than 70 and 30, so it trades often. At 60 or above it names the 5th tick as the highest, and at 40 or below the 5th tick as the lowest. Between the two it waits.
• RSI Barrier Push trades Touch / No Touch with a barrier above the entry. It buys Touch when RSI is at 70 or above and the price sits above its 20-tick average, and No Touch when RSI is at 30 or below and the price sits below it. If the two disagree, it waits.

Bots that read the midline. These care about which side of 50 RSI is on.

• RSI Barrier Trend trades Higher / Lower and only buys Lower. It waits for RSI to drop to 44 or lower, 6 points under the midline, with the price under its trend average, which catches a fall near its start.
• Asian Pressure trades Asians. At 58 or above it buys Asian Up, and at 42 or below Asian Down. In between it waits.

Bots that use RSI as one check among several. Triple Confirmation Trend only trades when RSI agrees with two moving averages and the recent price slope, and Confluence Gate when RSI agrees with a moving average and MACD. Adaptive Streak Fader uses RSI the other way round: it skips a trade when RSI is beyond 75 or 25. Band Pierce Sniper needs three things on the same tick: RSI at an extreme, the price outside its Bollinger Bands (a channel drawn around the price), and a 50-tick average on the other side of the price.

The settings that matter

RSI period. How many ticks the score looks back over, 14 by default. RSI Reversal keeps it fixed at 14; the other bots show it on the card. A shorter period swings to the edges more often, so the bot trades more; a longer one trades less. The table above shows how big the difference is.

Overbought level and Oversold level. The edges the bot waits for. Moving them towards 50 means RSI reaches them more often, so the bot trades more. Moving them out towards 80 and 20 means fewer, more one-sided entries. Run Reversal's and Reset Fade's cards say it in their pace note: "Move the overbought and oversold levels towards 50 to trade more often." On RSI Extreme Sniper, that means moving 25 and 75 towards 50.

Midline margin. On the midline bots, the gap either side of 50 that RSI has to clear. A smaller margin trades more. At 0, the bot trades whenever RSI sits on its side of 50.

Stake, limits and martingale. Most of these bots ship with a 1 USD stake, a 2.1x martingale with a 5 USD max stake, and a 10 USD take profit and stop loss. RSI Barrier Trend uses 1.5x and a 4 USD max stake. Untick Use martingale for a flat stake. The martingale guide explains the ladder and the stop loss and take profit guide explains every limit.

Building your own RSI bot

Open any of these bots with Edit in Bot Builder to see the RSI block and the rule around it. You can change the levels, swap the contract, or add a check of your own, all with blocks and no code. The Bot Builder guide walks through the editor.

Run one now

Open RSI Reversal and run it on your demo balance first. It trades Rise / Fall on Volatility 10 (1s), which ticks every second, so you will see it buy on both extremes within a short session. Then move its Oversold level and Overbought level towards 50 and watch it trade more often. For a bot that waits for a stronger setup, try RSI Extreme Sniper.