How to play RSI(2) Trading Pullbacks (ZT)

stringzero

As I mentioned in Part I of this series (Trading Pullbacks in Wall Street's Best Stocks, July 21, 2009). There are two approaches commonly used in trading: trading stocks
breaking out (championed by IBD among others) and trading stocks pulling back (championed by L. Connors among others). I'm particularly interested in how these approaches apply to trading fundamentally sound stocks, especially those with value left in their price. Here, I'll describe a strategy aimed at trading pullbacks.

Thirty-two stocks were chosen to demonstrate a strategy that triggers an end-of-day buy when its RSI(2) falls below a trigger value (2.5, 5.0, 10 or 20) and an end of day sell when its RSI(2) closes above 70. All trades were executed between January first and September 25th of this year. These 32 were fundamentally sound stocks
, as determined by a series of fundamental screens, had value remaining in their price, as indicated by their respective PEG ratios. Each had been a TSM pick over the past quarter.

As an example, consider Trade 2 (Chart I) which required RSI(2) to close below 5.0 before one entered long near the close. The position would then be closed at the end of day when RSI(2) exceeded 70. Note, both trade decisions would be made in the last five minutes of each trading session. Utilizing this strategy, these 32 stocks would have generated 138 trades (79.0% winners) and an average profit of 70 cents per share traded (the best win percentage of the four strategies, though Strategy 1 had a better average trade profit). Note, the red boxes highlight those stocks that generated overall losses. The following profit/loss results (+$73,950) could have been generated from Strategy 2 making 150 trades of 1,000 shares each.

continued ....  

http://www.tradingmarkets.com/.s ... Pullbacks-82348.cfm

stringzero

自己顶一下 呵呵

开小差

thx, ding

janez

As I mentioned in Part I of this series (Trading Pullbacks in Wall Street's Best Stocks, July 21, 2009). There are two approaches commonly used in trading: trading stocks
breaking out (championed by  ...
stringzero 发表于 2009-10-11 04:05

Thanks for sharing.
This strategy may have its limitations. Try it on SDS, it does not seem to work for it.