RSI(2) comments anyone???

E

evanboone

The short version: Was a buy and holder for 20+ years. A couple years ago, for reasons irrelavant here, found myself trading more actively, i.e, scalping and swing trading. Made the usual mistakes and am still learning everyday. My methodology has come down to a watchlist of ETF's and small caps under 8.00, and using RSI(2), S/R channels, and MACD. It's still not perfect but it's been pretty consistent at minimizing drawdowns and keeping me getting in at short term bottoms.

The question I have is, does anyone else use RSI as a confirming help and what have you learned about it?

Geez! that may have not been a very short version after all....
 
Though I don't know what "RSI(2)" is, traditional RSI is still a good indicator of oversold on daily charts.... both for spikes and divergent bottoms.

It's less effective for tops, but not entirely useless.
 
I should have added that I use the RSI(2) and the other TA steps I mentioned, on the daily chart ONLY, to determine if I should take the trade the next A.M.
 
Quote from evanboone:
and using RSI(2)...
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RSI(2)... immediately reminds me of a guy who goes by the name of "The Rumpled One" over at stockfetcher.com.
 
Quote from gnome:

Just what is RSI(2)? RSI calculated on 2 days?
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Yeah. Used with linear regression channels at the boundries works relatively well with some experience. Check out forum postings for the guy I mentioned over at stockfetcher. Very nice site for daily TA.. I haven't been over there in years...
 
As an oversold indication, I was referring more to something like RSI(14), then. I can't intuitively see RSI(2) being of much value, as it's mosly measuring "noise".
 
Quote from gnome:

As an oversold indication, I was referring more to something like RSI(14), then. I can't intuitively see RSI(2) being of much value, as it's mosly measuring "noise".
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Right, but at 2 and near the boundries of the LRC, it can show the "overnight" turn in long/short sentiment. This "rumpled one" guy (and others) seem to have made quite a bit of money with it in itself, as I described, and in combination with an assortment of of other indicators. This mixing of indicators is where stockfetcher really shines for daily TA. It really is a nice site. When I was registered there, it was only $7 a month.
 
RSI(2) is charted on the "daily" chart. Those guys often used it alone but it's no Holy Grail. I use it as a confirmer along with the others I mentioned, as a short term trading help. I'm usually in and out in 1-3 days.
 
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