Strategy Logic Building (Example: RSI + Supertrend)

You’ve built your first custom indicator. Now it’s time to take things up a notch:

• Create a trading strategy with actual buy/sell logic
  
• Test it on real historical data
  
• See if it works before risking any money

In this chapter, you’ll build a strategy that:

• Enters a buy trade when RSI is oversold and Supertrend turns bullish.
• Exits when RSI goes above a certain level or Supertrend turns bearish.

Unlike indicator scripts, strategy scripts use the broker emulator logic to determine price movement within a bar and by default wait for the bar to close to execute orders, which is the key difference compared to indicator types.

Strategy Logic

Buy Entry Conditions:

• RSI < 30 (oversold)
• Supertrend is in uptrend mode (bullish)

Exit Conditions:

• RSI > 70 (overbought)
• OR Supertrend turns bearish

Full Pine Scripts™ Strategy Code (With Comments)

Unlike indicator() scripts, a strategy() script in Pine Script™ uses TradingView’s broker emulator to simulate trades on historical data. It models how price moves within each bar and, by default, waits for the bar to close before executing an order — making it ideal for backtesting and performance evaluation.

//@version=6
strategy("RSI + Supertrend Strategy", overlay=true)

// === INPUTS ===
rsiPeriod = input.int(14, title="RSI Period")
rsiBuyLevel = input.int(30, title="RSI Buy Threshold")
rsiSellLevel = input.int(70, title="RSI Sell Threshold")
atrPeriod = input.int(10, title="Supertrend ATR Period")
factor = input.float(3.0, title="Supertrend Multiplier")

// === INDICATORS ===
// RSI
rsi = ta.rsi(close, rsiPeriod)

// Supertrend function
[supertrend, direction] = ta.supertrend(factor, atrPeriod)
isBullish = direction == 1
isBearish = direction == -1

// === STRATEGY CONDITIONS ===
// Entry when RSI < 30 and trend is bullish
longCondition = (rsi < rsiBuyLevel) and isBullish
if (longCondition)
strategy.entry("Buy", strategy.long)

// Exit when RSI > 70 or trend turns bearish
exitCondition = (rsi > rsiSellLevel) or isBearish
if (exitCondition)
strategy.close("Buy")

// === VISUALS ===
plot(supertrend, title="Supertrend", color=isBullish ? color.green : color.red, linewidth=1)

How the Strategy Works

How to Backtest It

1. Paste the code in TradingView’s Pine Editor
2. Click “Add to Chart”
3. Open the Strategy Tester tab
4. Check metrics like:

• Net Profit
• Win Rate
• Drawdown
• Number of Trades
• Profit Factor

You can also change timeframes (15-min, 1H, Daily) to see how performance varies.

Optional Tweaks You Can Try

• Replace RSI with Stochastic or MACD
• Add a stop-loss using strategy.exit
• Test with EMA filters or multi-timeframe confirmation
• Add shorting logic: strategy.entry("Sell", strategy.short)

To Sum Up

You’ve now written a working strategy that combines two popular indicators - RSI and Supertrend and even backtested it using real data.

It’s a major step toward building strategies you trust, test, and refine without risking money upfront.

Note: Pine Script™ is a trademark of TradingView Inc.