Simple RSI strategy?

I

IIAce

I looked at a few stock charts and found that stocks usually go up after a low RSI (< 20). What's wrong with a very simple strategy that uses that to trade with a 1-2% trailing stop?
 
Trend vs nontrend. When it's a trending day, it can stays at/below 30 for awhile. If you can distinguish between the two, then it's not a bad play. Many traders watch it so there is always a momentary lift when it gets to a very low RSI. It's not the holy grail but it can be reliable. And as you said, simple.

I use it to get a good entry point.
 
Why don't you test it?

Here's an idea for a starting point....

Identify your entry point then measure the MAE and MFE....then see if you can get a 1:3 risk to benefit...if you cant then come in the backdoor and ask yourself what enty point would I need?

Choose instruments that illustrate a history of reacting to the RSI...slim you universe down to a basket that you watch...The size of your basket is up to you..There may be software that can help you find RSI sensitive stocks...can't remember...but you can configure a scan for the universe...

Send me 10% of your profits...

Add some sort of a trend quality filter and then send me 20% of your profits...

Michael B.

Disclaimer
I do not trade equities and please no PM's. I have no idea if RSI works and do not use indicators in my trading...I just wanted to encourage the poster to test and make it his own.




Quote from IIAce:

I didn't mean to trade it intraday. Can this strategy work? Using ONLY RSI and a trailing stop?
More...
 
Electric?

Should I notify Bill Gates to suspend his plans to remove himself from the daily operations of MicroSoft in two years?

Wifey
 
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