Futures · technicalPositionalNIFTYlow complexity

Smoothed RSI crossover

This end-of-day NIFTY futures strategy compares the 14-day RSI with a 9-day EMA of the RSI itself. When RSI climbs above its own average, momentum is read as turning up and two lots are bought at the next open. When RSI slips back below the average, the position is sold at the next open. It trades long only, with a fixed stop 2.5 ATR below the signal close.

Buys two lots of NIFTY futures at the next open when daily RSI(14) crosses above its 9-day EMA, and sells when it crosses back below.

Market viewBullish

TradesNIFTY near-month futures, 2 lots, held overnight

RiskOpen-ended (loss not capped by the structure)

CapitalFutures margin

SuitsBeginner

Trades a month2

Typical hold3 days

Profitable months2 of 12

Longest losing run9 trades

Made money inNo condition was profitable in this testLeast bad: entries during an uptrend

Lost money inEntries when NIFTY is below its 20-day averageSignal days that close below their open

Default settings

Symbol

RSI period

Smoothing

ATR period

ATR mult

Roll time

Lots

Backtest this strategy →Change any setting, pick your own period and run it in the Quantsapp web app. Backtesting is part of the Max plan. Pro+ members can use it now as a free trial.

How it trades

What it trades

Universe

NIFTY Positional · 1 Oct 25 → 30 Sep 26

Enters

Next session's first tick after the crossover close

Legs

BUY FUT · Near month, daily RSI(14) crosses above its 9-day EMA · Current month, rolled at expiry · 2 lots

Exits

stop 2.5 × ATR(14) below the signal closesignal RSI crosses below its EMA: sell at next openroll closed 15:15 on futures expiry, rebought next month

Re-entry

Next upward crossover, also after a stop

Bars

daily bars of the rolled near-month future; built-in Wilder RSI(RSI_PERIOD) and ATR(ATR_PERIOD). Smoothed line = EMA(SMOOTHING) of the RSI.

Entry

a close where the RSI crosses above the smoothed line -> buy LOTS at the next session's first tick.

Stop

ATR_MULT x ATR below the signal close, fixed for the trade; at market once crossed.

Exit

a close where the RSI crosses below the smoothed line -> sell at the next session's first tick.

Re-entry

the next positive crossover (also after a stop).

Roll

on the futures expiry day the long is closed at ROLL_TIME ("monthly roll") and re-bought on the new near month at the next session's first tick; the stop is moved by the roll jump.

End

closed at the last tick of the test window.

Results

PRE-BUILT · DEFAULTS

NIFTY · 2025-10-01 → 2026-09-30 · 24 trades · before costs

Net P&L−₹5,18,212

Win rate17%

Max drawdown−₹5,78,572

Avg per trade−₹21,592

Profit factor0.15

Worst trade−₹98,540

Where it made and lost money

Every condition lost money in this test, but some far more than others. Entries with NIFTY below its 20-day average lost ₹3,44,414 over 9 trades without a single win, because an RSI bounce inside a downtrend bought a brief pause that the next leg down erased. Entries on sessions that closed below their open lost ₹3,03,582 over 9 trades, also with no winners. Entries in an uptrend still lost ₹1,50,918 over 14 trades. The 7 trades during which NIFTY fell more than 1% while held lost ₹3,15,643, too few to judge alone but consistent with a long-only system caught in falls.

Trend going in

Uptrend (NIFTY above its 20-day average)−₹1,50,91814 trades29% won

Downtrend (NIFTY below its 20-day average)−₹3,44,4149 trades0% won

Session direction on the entry day

NIFTY closed above its open−₹1,91,75014 trades29% won

NIFTY closed below its open−₹3,03,5829 trades0% won

India VIX the evening before

VIX below 11.5 (calm)−₹80,7237 trades14% won

VIX 11.5-14.5 (normal)−₹1,94,62310 trades20% won

VIX above 14.5 (nervous)−₹2,19,9866 trades17% won

Kind of session on the entry day

Quiet session (range under 0.75%)−₹1,34,00510 trades10% won

Trend day (closed near the high or low)−₹2,11,2397 trades29% won

Choppy day (wide range, closed mid-range)−₹1,50,0886 trades17% won

Market while the trade was held

NIFTY rose over 1% while held−₹30,0493 trades67% won

NIFTY within ±1% while held−₹1,05,45010 trades20% won

NIFTY fell over 1% while held−₹3,15,6437 trades0% won

How the entry day opened

Gap up of 0.4% or more−₹2,35,6825 trades0% won

Flat open−₹2,79,64415 trades13% won

Gap down of 0.4% or more+₹19,9943 trades67% won

Expiry day (NIFTY weekly)

Expiry day−₹1,37,9986 trades17% won

Other days−₹3,57,33417 trades18% won

Day of the week

Monday−₹1,29,9818 trades12% won

Tuesday−₹1,37,9986 trades17% won

Wednesday−₹2,16,0155 trades20% won

Thursday−₹11,3384 trades25% won

The same trades, split by the market conditions around each entry, before costs.

About this strategy

Build daily candles of the near-month NIFTY future and compute RSI(14), a 9-day EMA of that RSI, and the 14-day ATR.
When a day closes with RSI crossing above its EMA, buy two lots at the next session's first tick.
Set a stop 2.5 × ATR below that signal day's close; it stays fixed for the trade.
When a day closes with RSI crossing back below its EMA, sell at the next session's first tick.
A later upward cross can re-enter, including after a stop. Crosses printed on the first session after a futures expiry are ignored.
On futures expiry day the long is closed at 15:15 and bought again in the next month at the following open.

Why traders use it

RSI on its own swings around a lot, and fixed levels such as 30 and 70 can stay out of reach for weeks. Smoothing the RSI and trading crosses of the raw line over its average works like a MACD of momentum: it reacts to changes in direction rather than extremes. Deciding on the daily close means one check a day, and the ATR stop gives a volatility-based backstop in case the exit signal comes too late.

Works best whenNo market condition produced a profit in this test. The losses were smallest when NIFTY was already above its 20-day average, so the RSI cross confirmed an existing uptrend rather than a bounce inside a decline.

Struggles whenDowntrends, with NIFTY below its 20-day average, where an RSI cross upward is a short-lived bounce, and signal days that close below their open; entries in those conditions in this test did not win once.

The year in plain words

This was one of the weakest results in the period. With two lots of NIFTY futures from 1 Oct 2025 to 30 Sep 2026, the strategy closed 24 trades and only 4 were winners, for a ₹5,18,212 loss before costs and a profit factor of 0.15. Average losses (₹30,383) were larger than average wins (₹22,362), and the ATR stop never triggered; 19 trades ended on the RSI cross back and 5 at a monthly roll. February and March alone lost over ₹3 lakh, and the drawdown reached ₹5,78,572. After ₹20 per order and bid-ask slippage the loss was ₹5,37,257.

What the settings do

RSI periodThe number of days in the RSI. Shorter periods make RSI jumpier and produce more crossovers.SmoothingThe length of the EMA applied to the RSI. A shorter EMA hugs the RSI closely and causes more frequent, smaller crosses.ATR periodHow many days the ATR averages when sizing the stop distance.ATR multHow many ATRs below the signal close the stop sits. At 2.5 it was never reached in this test; tighter values would cut some losses earlier.Roll timeWhen the long is closed on futures expiry day before being bought again in the next month.

Risks

The default size is two lots, so every move in NIFTY counts double; single trades lost up to ₹98,540 here.
The 2.5 ATR stop is wide and did not trigger once, leaving the next-morning exit as the real control.
Entries and exits happen at the next open, so overnight gaps decide the fill price.
The strategy lost heavily in this test and was in drawdown for most of the year.

Who it suits

Positional traders who check charts once a day, have margin for two NIFTY futures lots held overnight, and want a simple long-only momentum filter, while understanding that it lost money throughout this test.

Questions traders ask

What is the smoothed RSI crossover strategy?

It plots a moving average of the RSI and treats the RSI crossing above that average as a buy signal and crossing below as a sell signal. Here RSI(14) is compared with a 9-day EMA of itself on daily NIFTY futures candles, trading long only at the next session's open.

Is the RSI crossover strategy profitable on NIFTY futures?

Not in this backtest. From 1 Oct 2025 to 30 Sep 2026 with two lots it lost ₹5,18,212 before costs and ₹5,37,257 after ₹20 per order and bid-ask slippage, winning 4 of 24 trades. Past results do not guarantee future ones, good or bad.

Why does it trade at the next day's open instead of the close?

The signal is known only once the daily candle has closed. Acting at the next session's first tick is the earliest honest fill in a backtest; trading at the same close would assume knowledge of a price before it was final.

Does it ever go short?

No. A cross of RSI below its EMA only closes an open long. Adding a short side would need a separate rule set and would change the results entirely.

Terms used here

RSI Moving average (SMA / EMA)ATR Futures Stop loss (SL)Rollover Trend following Before costs / after taxes / after all costs Max drawdown Position sizing

Before you rely on it

ADAPTED FOR TODAY'S NSE RULES- The source decides at 15:20-15:30 on the forming daily bar (with the old 15:30 close). Per the spec the decision uses the completed daily close and acts at the next session's first tick - no clock time is hard-coded. - RSI period and smoothing type are not on the page: RSI(14) against an EMA(9) of it, per the spec; the source's 2 lots are kept (LOTS) - the lot size comes from the exchange each day, never hard-coded. - The rolled future jumps at each monthly roll and the built-in RSI / ATR are unadjusted. A crossover printed on the first session after a futures expiry is ignored (it may be the roll jump). The stop is held on a roll-adjusted scale (that session's open minus the expiry day's close is taken out) and turned back into the held contract's price. NIFTY is the default (the source covers NIFTY / BANKNIFTY).

WATCH OUTdaily crossovers are a few a month; a 2-week window may not trade. Gross of costs.

Also known asRSI signal line crossover

Backtests run on historical NSE data with fills at the last traded price. "Before costs" excludes brokerage, taxes and slippage. Quantsapp is not recommending any strategy; it is just a backtesting utility. Past results are not a promise of future returns.