1. Quick overview of the indicators
Relative Strength Index (RSI):
Measures the market's overbought or oversold conditions on a scale from 0 to 100, with typical overbought levels at 70 (overbought) and 30 (oversold).
MACD:
Compares two moving averages (long 26 and short 12), adds the signal line (9) as well as the histogram to measure the difference between them, helping to reveal trend reversals.
2. Setup steps on the Binance platform
1. Open the trading screen for ETH/USDT (Spot or Futures).
2. Click on Indicators above the chart.
3. Add:
RSI with default settings (14 periods).
MACD with default settings (12, 26, 9).
4. Ensure the Histogram box appears below the MACD indicator to display the divergence of the lines clearly.
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3. Strategy steps
1. Identify overbought/oversold areas
Buy (Long) when RSI falls below 30 (oversold).
Sell (Short) when RSI rises above 70 (overbought).
2. Confirm the reversal via MACD
In oversold conditions (RSI<30), look for a bullish crossover (MACD Line crosses Signal Line from below to above).
In overbought conditions (RSI>70), look for a bearish crossover (MACD Line crosses Signal Line from above to below).
3. Open the trade
Click Buy/Long at the bullish crossover, or Sell/Short at the bearish crossover.
4. Risk management
Set Stop-Loss 1–2% from the entry price below/above the nearest local low/high.
Set Take-Profit with a risk-to-reward ratio of 1:2.
Monitor the Funding Rate in futures contracts to avoid high financing costs.
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4. Simplified practical example
RSI reached 28 → Oversold.
Noticed a bullish crossover in MACD → Buy signal.
Entered a Long position at 1,850 USDT and set Stop-Loss at 1,815 USDT (1.9% below), and Take-Profit at 1,888 USDT (with a risk-to-reward ratio of 1:2).
Do you plan to try this strategy on ETH/USDT? Share your results or questions in the comments!