2 Period RSI Trick for Mean Reversion Trading
ฝัง
- เผยแพร่เมื่อ 4 ก.ค. 2024
- In this video I demonstrate a way of the using RSI Relative Strength Index indicator to time buying points for the S&P 500 index. We look at the effect of entering multiple positions compared to 1 single position.
Results show that entering multiple positions using signals for the 2 period RSI produce a better net profit to drawdown ration than just entering 1.
All the testing is done using Tradestation.
Data is from Tradestation.
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DISCLAIMER:
I am not a financial advisor and I am not offering you financial advice. I am not regulated in any way. The purpose of the content I provide is for educational purposes only.
Any information you receive is based on my own knowledge and experience in the financial markets and how you act on the information provided is your own responsibility.
I cannot be held responsible for any losses you may incur as a result of ideas taken from my content provided.
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In a trend, the RSI will tend to peg on the high or the low side depending on direction. A lot of your exits seem to be premature leaving profit on the table when the run continues. I think you could improve this by a slightly more sophisticated exit. This could be 1) wait N bars before exiting after crossing the threshold for exit (N is likely 1 or maybe 2, but not likely more), 2) stay in the trade until RSI crosses back down across the sell threshold, 3) exit once the RSI is above the threshold AND has peaked and is heading down. I suspect the last is best or close to it.
Yes please, some more testing of this strategy would be great. Thanks Larry
Great video looking forward to testing it out, it really does resonate with me. Please keep informed on the progress and additions or refinements to this strategy. THANKS AGAIN
great content and i would like to see the next test.
I used to use RSI(3) crosses below 28 as a trading system years ago.
Win rate means absolutely nothing without quoting the payout ratio. My best Algo that has a consistent multiple year profitable track record in live trading has a win % of less than 45%.
Would love to see that testing!
Yes please, 2nd or 3rd retest under the RSI2-10 line for Entries - sounds good.
Backtest of the third one would be great
yes please test only taking the third one
Excellent work as usual! However, having no stops as trading strategy is quite a gamble, could you backtest it with say 1.5ATR stop loss or something like that? thank you!
Thank you so much this is awesome
This is amazing technique. Does this strategy work for major forex pairs? Would be good to know your view. Thanks.
Great job, but where to put stop loss incase for single / multiple entry !!?? please advice
What time frames does this work on, or ideal time frame pls?
Jarrod, I was under the impression that a mean reversion strategy was meant for ranging markets, with the idea being to fade at the extremes. But this video shows your strategy buys into pullbacks during a bullish trend. This makes me curious... How do you define the term mean reversion?
Would there be a reason not to stay in a trade as the RSI passes over 70 and exit on the RSI dropping back below 70?
I was thinking the same thing.
Thanks Jarrod! How do you determine where the stop loss should be?
There would be no stoploss. Most of the Larry Connors strategies don't have one.
@@FuryPilothow, as if you’re in a trade during covid for example and then the market tanks, you’ve blown your whole account?
@@ruhaanbhatt9555 Your exit is controlled by the RSI value. The intent is that your trade is closed out by an RSI of 70.
Given that it is a mean regression strategy, this should be occurring often - which is why this strategy is for the S&P, which I gather trades upwards most of the time.
Larry didn't know about covid...🙂
But you could put it in the code so that it is a testable variable and then find the optimal stop loss amount per trade. I use Ninjatrader Strategy Builder, but it might even be easier in Easylanguage
I saw good results for the 2 period rsi on gold futures. Bless larry connors for coming up with it
Please share some strategies for (mini & micro) futures that can be traded via multicharts with prop firms :)
The difficult thing is they don't allow holding through cme close, so one has to be out by 3:15pm CT 😬
RSI is "relative strength INDEX" not "indicator."