MACD and RSI Trading Strategy: Rules, Setup, Backtest – Achieving an 80% Win Rate

There are different ways of performing technical analysis. While some focus on price action, others make use of indicators. Both moving average convergence divergence (MACD) and the relative strength index (RSI) rank among the most popular indicators used in technical analysis and trading. But what is the MACD and RSI strategy?

The MACD and RSI strategy refers to a trading method that makes use of both indicators in analyzing and trading the markets. The combination of both momentum indicators may give more insight into what the market may do next and how it could move in the future.

The MACD indicator is a moving average-based momentum oscillator primarily used to analyze trends, while the RSI is a momentum indicator primarily used to identify overbought/oversold conditions in the market.

In this post, we take a look at the MACD and RSI strategy and we end the article with a backtest that combines both indicators.

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MACD and RSI strategy backtest and performance

Let’s set up a specific MACD and RSI strategy