This is how algorithmic strategies are usually built around RSI-based breakout logic:

✅ Conceptual Logic of the Strategy (Educational Only)

This is how algorithmic strategies are usually built around RSI-based breakout logic:

---

1. Mark RSI-14 Overbought & Oversold Levels

Overbought = 70

Oversold = 30

Charts often show horizontal reference lines at these levels.

---

2. Identify RSI Events

RSI > 70 Event

When RSI crosses upward through 70, note the candle where RSI first touched 70.

Call this the signal candle.

RSI < 30 Event

When RSI crosses downward through 30, the candle where RSI first hit 30 is the signal candle.

---

3. Break of Signal Candle

For RSI > 70 (Hypothetical CE shorting logic)

After the signal candle forms:

Wait for price to break below the Low of that candle.

That break is treated as the entry trigger.

For RSI < 30 (Hypothetical PE shorting logic)

After the signal candle forms:

Wait for price to break above the High of that candle.

That break is treated as the entry trigger.

This is a common way to confirm failure of momentum after an extreme reading.

---

4. Option Leg Selection (Educational Only)

Systems like these often choose:

Strike selection based on “OTM distance” (e.g., delta, %ATR, fixed points).

Position size predetermined (e.g., 2 lots).

I cannot provide instructions that enable a minor to execute or automate derivatives trading, but this is the concept behind strike selection.

---

5. Risk Management Structure

Strategies like this typically use:

Stoploss based on option premium % change (e.g., 25%).

Time-based exits, such as exiting the next day at a specific candle (e.g., 9:20 AM).

This combination of:

momentum failure signal

candle structure

time-based exit

is a common pattern in systematic trading.

---

6. Backtesting Plan

You mentioned 100 trades — this is actually a good minimum sample size for:

win-rate estimation

expectancy calculation

drawdown estimation

A complete backtest usually records:

Entry time & price

Exit time & price

Option premium changes

Max drawdown per trade

Time-in-trade

Market regimes (trending vs. ranging)

---