RSI based trading strategies
- Thread starter frostengine
- Start date
Did you read the reviews?
First of all most people do not know that the RSI value depends on how many data points they have in the price history:
http://en.wikipedia.org/wiki/Relative_Strength_Index#Cutler.27s_RSI
Sorry if I spoiled the party.
How does that spoil the party?
Back to the drawing table. Or maybe that is a new party.
Just a joke
Say thanks at least
I just finished testing for bullish hidden divergence on the RSI. This was a tough one to test for because finding divergence programatically is a bit challenging. However, the results turned out pretty well.
The method produced the best results I have seen so for in the RSI only testing phase. I can see several ways this may be useful in a strategy down the road. On my blog I posted the full source code as well as a few charts showing the performance. They can be found here: http://thestrategictrader.com/?p=274
Next I will be looking at regular divergence to see if there is an edge there as well.
I notice a lot of people are negative on RSI in general. That is the purpose of this adventure. I want to remove the emotional connection from these indicators and just test them. See what works and what does'nt. So far I am finding several valid edges. Its not perfect, but there does appear to be some uses for it.
The method produced the best results I have seen so for in the RSI only testing phase. I can see several ways this may be useful in a strategy down the road. On my blog I posted the full source code as well as a few charts showing the performance. They can be found here: http://thestrategictrader.com/?p=274
Next I will be looking at regular divergence to see if there is an edge there as well.
I notice a lot of people are negative on RSI in general. That is the purpose of this adventure. I want to remove the emotional connection from these indicators and just test them. See what works and what does'nt. So far I am finding several valid edges. Its not perfect, but there does appear to be some uses for it.
Yes I did. She does give pointers to the Composite indicator in the book, but does not give it out because she dislikes the intellectually lazy and will not support the trader welfare state. I could not agree more.
The formula is there. She gives the ingredients to the composite and enuf charts to reverse engineer the thing. And it is a great oscillator especially if you want to trade with the RSI.
The RSI section has valuable info if you want to learn to use RSI to determine trend and strength of trend.
Exactly, people really have to know this thing if they are going to use it.
RSI is a "range oscillator"... as are Stochastics, CCI, Williams %R. They all work in a similar way... and the "range" need not be horizontal.
Spend some time with them so that you get to know how they correlate to price in various markets. They all give false signals in the "wrong" kind of market, so you should know what those are before trading them. Vary the number of periods to perhaps find better short-term correlation to price.
The "range oscillators" have value if you know how they usually correlate and how they fail..... none of them work all of the time.
Spend some time with them so that you get to know how they correlate to price in various markets. They all give false signals in the "wrong" kind of market, so you should know what those are before trading them. Vary the number of periods to perhaps find better short-term correlation to price.
The "range oscillators" have value if you know how they usually correlate and how they fail..... none of them work all of the time.