drawdown -7.25 CAR/MDD.57 Clearly my results are quite a bit different. 2 Brokers that we like A LOT! Here is an ideal sell example. 4: add all the downwards movements between closing prices. Get The Book, downloads. Watch the Centreline for trend confirmtion. Prices continued to fall steadily and eventually on the next buy signal, the trade was exited with a very favorable profit. The RSI indicator is a cruel mistress! In reality your charting software will do this calculation for you, thats what technology is for!
And the back test results! Digging into the quintessential overbought oversold indicator! The RSI indicator is a cruel mistress!
Its a very popular indicator measuring relative strength in a security and is most often used on a 14-day timeframe, with values ranging from 0 to 100. If you want the exact formula, you can Google it and find it somewhere else. In total the trader made 220 point gain in their trading account over 8 trades. Test Two Cumulative RSI on SPY In the second test, Connors comes up with a strategy which uses a cumulative RSI. This can give you a great opportunity to get in at a cheaper price and profit from the momentum. Here are some quick lessons: Wait for conformation before considering a trade, The RSI can remain at extreme levels for long periods in a strong trend SO; Dont jump right in when you see a reading of 90, first allow the RSI line to fall.
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Nevertheless, lets run the strategy and see how its martin armstrong bitcoin performed in more recent years. And then follow the RSI lower. Buy on close when cumulative RSI(2) of the past three days is below. The idea of a cumulative indicator is also one that could be transferred to other indicators/strategies. This strategy is run between 19is shown in the book to produce the following returns:. Here are the results of the above back tests of the 5 trading systems; Simple RSI strategy In total this system made 220 point gain over 8 trades, 2 winning trades and 6 loosing trades. RSI Bollinger band: In this trading strategy, We combine the RSI indicator along with a Bollinger band squeeze. It does rather well.