New Improved! 2 Period RSI Trading Strategy
ฝัง
- เผยแพร่เมื่อ 31 ก.ค. 2021
- Watch to see how I improve an old 2 period RSI strategy from Larry Connors and Cesar Alvarez for trading the S&P 500 / Emini.
I take a popular mean reversion trading strategy originally documented by Connors and Alvarez in their book "Short term trading strategies that work" and attempt to make improvements.
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EMAIL ME: jarrod@thetransparenttrader.com
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.
Ive been implementing 2 Day Period RSI strategy on the Daily Charts for 2 years. I found some success when the RSI read 0.99 or below.. It led me to AMC at 2.00 (Check the Charts!). For 1 Year now.. I'm finding better success, when the 2 DAY Period RSI on the Weekly Chart, reads 0.10 and below for entry. These are for any kind of stocks. Penny to Large Cap. It gives the RSI time to breathe a little bit. And if the stock drowns or stays flat for the entire week, that's only in your favor! You either Average down or just sit tight. IMO, this gets you close to the bottom before a spike in the RSI happens.
A very insightful video. I appreciate the baby steps it takes to master the ropes of profitable trading.
Most traders are searching for that elusive method where they never lose or can win eight or nine trades out of 10, amassing huge profits in a short amount of time with no risk, which I'd say is ill advised. >
Trading successfully takes time. There is always SOME level of risk, which needs to be understood and managed.
Trading is just like anything else in life. You will be burned if you do not come prepared. Only a few people have turned $1,000 into hundreds of thousands of dollars. The majority of people will not.
The problem is that some strategies are extremely difficult to grasp and difficult to incorporate into my trading strategy; to be honest, it's extremely exhausting.
@@miranda-sun It's best to experiment with what works for you, understand it, and stick to it. Trading is mentally taxing; you're probably better off hiring a professional to trade for you. It's a safer way to reduce risk and earn while learning.
@@berchtoldsveryown I couldn't have put it better myself. You are entirely correct; seeking professional assistance is the next best thing to achieving excellence in trading on ones own.
Yeah after dozens and dozens of backtests in various markets on various time frames I've come to the conclusion this can work on nearly everything on the daily timeframe. So its very robust and not overfitted at all. And this is using the exact rules you laid out. I've also done very well with other rule sets still using the RSI 2. And Testing with many kinds of take profit strategies and stop strategies I've found that giving it a 1.5/1 reward to risk using a stop just below the low of the entry candle has done very well. Thanks for the strategy. You do trading a great service Jarrod with your honestly and are a refreshing oasis in a sea of wannabe bullshitters on TH-cam.
Bro You are doing great work....!!! Keep Uploading stuff like this😊
I've found the 2 period RSI on hourly timeframe extremely accurate
I see
See i
Any particular markets you use it in the most?
Is not accurate
@@roll7705 depends on the symbol, there will always be breakouts and some stay rangebound more than others, always watch the boundaries and wait for confirmation bounce or breakout
I'd love you test a really simple strategy for me: trade long with a finish above the 33sma when it first doesn't make contact with the sma, and short whe it finishes below, again, on the first bar that doesnt make contact with it. Stops to be put at the most recent high or low pivot. Love your videos. Cheers, Mark.
Thank you for the great content, huge fan of you. If you allow me, one recommendation: please introduce an evaluation matrix to the system to benefit every one what exactly the required parameters when comparing/evaluating two or more systems. Keep it up!
Do you trade forex dear?
@@norhcchulis6789 no! Only stocks
Thank you Jared very well. Can you please check it out: Will the strategy also work short? In low time windows? With another MA / maybe 34? - Thank you very much for the educational video. God bless you.
Eyy another video!
Do you trade my friend?
Can you tell us where to set our stop loss?
One ticket for trade..??
instead of buying the underlying could you instead buy an at the money option , either a put or call.. you are using the 10 level to buy and exit at the 70, would you then use the 90 level to sell and the 30 level to exit the short....you could use monthly options for this since you wont be in the option that long and also you wont have to use a stop loss.. just asking , thanks
Will this work on individual stocks with long above the 200 day average and short below the 200 day?
The problem with the indexes is the lack of trades.
Hi Jarrod, how do you allocate your position size in this kind of strategy? If your stop loss is 200 points and using the standard 1-2% risk percent on each trade you would only gain a very small fraction of a percent on a winning trade and a loss would wipe out many of the previous gains. Are you comfortable risking a higher amount knowing the stop is not going to get hit >90% of the time? In my backtest, I get a CAGR of 0.83% risking 1% per trade.
how a CAGR of less than 1% is good ? this is ridiculously low !
I'm backtesting this strategy, let's see. GOD bless you ( : Peace and, respect from FAISALABAD, PAKISTAN.
Great stuff! This illustrates why it takes so much discipline to trade profitably. First do the work to find a profitable system, then for God sakes stick to it!
have you compared against holding?
could u take something like this and apply it to day trading?
Bro I just ran this through history... and that dip below 10 on the Rsi is mostly just the beginning of a much longer down trend... Try buying when going above 70, and selling when going bellow 30 on the rsi set to 14 on 15min time frame for example and join the impulse. Its crazy how good it is.
Different levels work differently on each timeframe. I'll check out your suggestion though!
@@TheTransparentTrader seems to work on all timeframes.. when we touch the 30 on 4h for example we might get another leg down etc
@@TheTransparentTrader price needs to be above the 200ema when we buy the over 70 rsi or below 200ema when selling the low 30 rsi for it to work better
@@BOOMOPERAMUSIC thats all wrong. it produces bad results. i ran a similar test on around 2k stocks and its undeniable that a low rsi performs better in timeframes above 1h
Do you have a link so I can see your ranking on the best to worst profitable strategies that you have tested? Thanks!
Unfortunately I don't have a ranking system. It's hard to rank strategies as they are often designed to meet different trading objectives of mine. And I always trade multiple strategies which I try to make complement each other.
What is the time period within daily time frame?? Ex Daily time frame RSI is 50 and 15mins RSI is 10??
Does this strategy work on a 4hr time frame ?
This works on EUR/USD as well.
Thank you sir love from Hindustan
how does it work with shorter time frames for intraday trading? Have you had the chance to test? 5 mins charts may be?
Haven't tested it yet. Very much doubt i would work on a 5 minute chart as you won't be able to catch a large enough move.
I don't know if Leonard is a good trader ....but he is a hell good advertiser... 😊
what is he selling? did you buy it?
Another great video! Did the algo enter everytime when the Rsi went below 10, even if the 12day delay wasn’t over, or did it ignore new signals once it was in a trade during the 12 day time period?
If it's already in the trade, it ignores new signals and stays in the original position. It doesn't double up.
@@TheTransparentTrader Hello Sir great video will this strategy work for forex trading I am scalping on 15 M timeframe using 1 hr timeframe for signals.
Do you trade binary friend??
@@norhcchulis6789 Hi I use to trade binary no success then I start to learn forex trading am still learning .
Brilliant job, mate! Loving all of your videos-especially these on the Connors-Alvarez strategy. I just have one simple follow up question, if you don’t mind: What line of code would you add if you wanted the strategy to buy again (i.e., average down) every time the RSI dipped below 10?
Send me a quick email jarrod@thetransparentrader.com and I'll help you out with the code.
for everyone else interessted implementing it in tradinviewa pinescript:
isBuy = ta.rsi(close,2) < 10
if(isBuy)
strategy.entry("buy", strategy.long)
then proceed to set the allowed trades amount in the config. it will do one trade per bar
@@TheTransparentTrader have you tried maybe buying only when the RSI crosses back up the 10 line rsi and setting a stop loss below the swing low when the prices are below the 10 rsi?
Jarrod@@TheTransparentTrader
are you including the fee of the broker to keep the position open overnight?
No, there aren't any costs included. It's the way I develop strategies. This is why the Average Trade value is very important to be mindful of. This strategy has a high average trade value so even after costs it is still profitable.
200 ΜΑ on Daily chart …..how much lag can you afford andhow often do you get signals…..
Earn less than 1% for out 11 of 13 years period and 2 years loss. I think it is better to compare the result with buy and hold strategy or even bank saving account.
I coded this but did only get 48% winrate on SP500..... would be great to see a part in the video where ALL rules specially MA filters were shown!
Did you compare the same period? I would imagine that 2022/2023 has not been the best years for trading strategies because of the volatility.
I coded it and it was almost spot on and the moving average exit has worked the best and a win rate of 88 percent. The 12 days plus first profitable didn’t work so well in 2022 I believe, the moving avg exit is very robust.
Sir please add subtitle in your videos.
This strategy risks dollars to make pennies, or basically fractions of a penny, where one stop out could wipe out 10-20 winners. And this is done on the SP500, an index that practically only ever goes up in the long term. If you're willing to hold through 200 points of downside, why not be willing to wait through 200 points of upside? Or 400? Basically buy and hold swing trading.
Hint...think options.
@@chuckharkes6569 Not sure what you're implying here. Options give you leverage, it doesn't change the risk profile of the trade unless you're hedging with spreads, but at that point you're not really following the strategy outlined in this video.
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Same here, I made $12,400 profits on investing since I started trading with john david his trading strategies are too notch am winning consistently trading with Mr john he's really the best have made more profit with him
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After watching so many TH-cam tutorialvideos about tradingI was still making losses untill Mr john david started managing my investment now, I make £6,800 weekly.God bless bless mr john david
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You doing okay man?
This is the best and i tried all indicators lol
Is this better than Smash Day?
It's a different strategy for a different market. It's hard to say what's best. I trade a combination of strategies across a combination of markets.
how a CAGR of less than 1% is good ? this is ridiculously low !
HOLD ON HOLD ON, IF I GOT IT RIGHT...Did u just mention ur risking 20points or 200pips in order to catch on average 10poits (100pips)...?🤔🥴🤣
5:14
I enjoy this channel but there are way to few trades to be worthwhile. Can you not try and develope a strategy using a lower time frame?
Why not staying in the trend rather buying n selling in this uptrend
Holy curve fitting, batman!
91.67% win-rate and 0.57 reward to risk... Kelly Criterion says go 75% account risk! 😂
I think one full stop loss blows the account, assuming you can get the leverage to ride drawdowns. 😂😂😂
My backtests do not mirror your results. Admittedly on forex, but no, does not work.
Trading and investing is easy and safe with the right help that's why I trade with Mrs Theresa she's the best
I thought I was the only one who trades with Mrs Theresa she's really great I have made close to $30000 this month trading with her system
How
I have made over $7000 trading as a beginner under the guidance of Mrs Theresa she's amazing
She's really good I earn profits every week trading with her system and strategies
I saw a review about her and ever since I started trading with her I have made and learned so much
the paid-by-companies trader =)), dressed in a freaking costume, how much they pay you to do these videos?
Rubbish